• The Transactions of The Korean Institute of Electrical Engineers
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• v.67 no.4
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• pp.512-521
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• 2018

Islands that is far away from onshore have used internal-combustion engine driving alternators to secure electric power. However, with Paris convention on climate change, there is a growing interest in eco-friendly energy independent island that replaces microgrid(MG) consisting of photovoltaic, wind power, and energy storage system with alternators for internal combustion engines. And also, national emission trading has been implemented, and the price of certified emission reduction(CER) has a influence on system marginal price(SMP). Because, the low cost generation source decides SMP when CER price is low, while the more expensive generation source decides SMP when CER price is high. Therefore, the increasing of CER price has a strong influence on the annualized return of MG independent power producer. Moreover, the fixed RPS price is implemented from 2017, which the increasing of CER price under the fixed RPS price or the variable RPS price affects annualized return differently. In this paper, the annualized return according to CER price is analyzed for large, middle, and small scaled islands, the effect of CER price on the annualized return was confirmed.

• Environmental and Resource Economics Review
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• v.29 no.1
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• pp.91-111
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• 2020

While the renewable energy portfolio standard (RPS) is in place to expand the scale of renewable energy generation, the power producer can obtain the renewable energy credit (REC) and use it as an incentive to operate the facility. RECs secured by solar power generation can be traded through spot market or fixed price contracts, and, in the spot market trading, power producers are exposed to the uncertainty of REC spot price. In this study, real option analysis is conducted to analyze the optimal threshold of REC spot price for the conversion of REC trading method by power producer considering the uncertainty of REC spot price. We calculated the optimal threshold of REC spot price that can convert the trading method of REC from spot market to fixed price contract. In conclusion, the spot market trading is a rational trading method when considering the uncertainty of REC price, but the fixed price bidding is a rational trading method when not considering the uncertainty of REC price.