Energy Policies and Comprehensive Evaluation of Their Impacts on Determining the Optimal Amalgamated Expansion Strategy of Renewable and Conventional Units Capacity

In this paper, the impacts of energy policies on environmental and economic issues are investigated in the context of generation expansion planning (GEP) problem. Furthermore, detailed explanations on how these policies work is elaborated. For this purpose, first, by incorporating some of the most popular energy policies into the GEP problem, a comprehensive model is proposed. Named Integrated Renewable-Conventional Generation Expansion Planning (IRCGEP), the model is based on a suitably modified objective function and additional constraints. The IRCGEP model is formulated as a mixed integer non-linear programming problem and solved in several scenarios using GAMS optimization package from a generation company point of viewed. Then, regarding the obtained optimized expansion strategies, the effects of the policies on the generation company’s profit, electricity consumers surplus, and environmental damages cost is examined. In this framework, to analyze the consumer surplus affected by financial burden of the policies, an appropriate price criterion, the so called “virtual price”, is also proposed. Analyzing the cost of environmental damages derived from power sector emission is accomplished by the estimated social cost of carbon. Obtained results reveal that the energy policies have positive impacts on renewable energy promotion as well as emission mitigation. In addition, among considered policies, the most effective policy is introduced from an economic-environmental perspective.