Considering power plants mothballing in long-term simulation models for liberalized power markets

Abstract

This paper proposes a methodology for modeling mothballing decisions in order to better study the different strategies adopted by power plants owners and their impact on power systems (in particular generation adequacy). A system dynamic approach is adopted to build a model which represents investment, mothballing and shutdown decisions in an energy-only market. The results obtained with the proposed modelling methodology highlight the importance of considering mothballing in long term simulation models of power markets. They show how models which neglect mothballing decisions might overestimate or underestimated the level of available capacity, therefore leading to inappropriate policy choices. The proposed methodology could better inform policymakers on their decisions.