A Class of Mathematical Models for Low Carbon Electricity Planning

Abstract

India's electricity system is faced with the challenges of meeting the growing demand for electricity, managing recurring shortages in supply and addressing concerns of global warming. India is adopting a two-pronged approach to address these challenges – (i) making huge investments in new technologies, and (ii) enacting new policies to promote low carbon initiatives. Together, they are believed to help in achieving energy security as well as mitigation of global warming. Such low carbon initiatives can alter the traditional electricity planning and provide with a wide set of supply options to achieve a transition in to a low carbon electricity planning (LCEP). At the outset, one has to explore the supply options for an optimal supply-demand matching of electricity. While finding out various alternatives to meet the demand on a continuous basis using existing supply, non-supply and future supply options, the technology challenges of low carbon options, renewable energy policies and emissions policies need to be studied in detail from the perspective of a developing country keeping India as a focus. The effectiveness of renewable energy and emissions policy interventions such as Renewable Purchase Obligation (RPO), Renewable Energy Certificate (REC), Renewable Energy Certificate Excess (RECX), Emission Tax and Emission Cap-and-Trade and emission policies need to be assessed. Based on the analysis of the literature review, it appears that there is no mathematical model for optimally matching the supply with electricity demand simultaneously considering all the complexities for LCEP discussed in this study. The overall objective of the research is to develop, validate and apply a set of mathematical models to address a complex research problem of "LCEP of existing supply, non-supply and future supply options in the presence of technology and policy interventions to achieve a least-cost, low carbon and sustainable electricity system". This complex research problem is decomposed into five independent LCEP problems based on real-life situations. For each of these five LCEP problems, a mathematical model is proposed. For generating the five proposed mathematical models for any given data, LINGO Set Codes have been developed. In order to validate the proposed mathematical models, data was collected from the Karnataka state electricity system. For the collected data, the proposed mathematical models are generated using the LINGO Set Codes and solved using LINGO. From the optimal solutions, insights are drawn on the impact and effectiveness of low carbon interventions on the present electricity system which is in a transition towards a low carbon electricity system. It is our belief that the proposed mathematical models can act as a basis for introducing any new low carbon interventions such as energy efficiency certificates, auction based tariff mechanisms for renewable energy pricing, and other new REC interventions in the future scope.