Meeting corporate renewable power targets
dc.contributor.author
Trivella, Alessio
dc.contributor.author
Mohseni Taheri, Danial
dc.contributor.author
Nadarajah, Selvaprabu
dc.date.accessioned
2020-10-27T12:05:48Z
dc.date.available
2020-10-27T11:27:02Z
dc.date.available
2020-10-27T12:05:48Z
dc.date.issued
2020-04
dc.identifier.uri
http://hdl.handle.net/20.500.11850/448178
dc.identifier.doi
10.3929/ethz-b-000448178
dc.description.abstract
Prominent companies have committed to procuring a percentage of their power demand from renewable sources by a future date. Long-term financial contracts with renewable generators, known as corporate power purchase agreements (CPPAs), are popular to meet such a renewable power purchase target (RPPT). By analyzing a simplified three-stage model, we show that the generation capacity contracted via a CPPA is more nuanced to structure optimally compared to traditional long-term power contracts due to the interplay between price and supply uncertainties as well as the RPPT. We subsequently propose a Markov decision process (MDP) to formalize rolling-power- purchase policies used in practice, that is, the construction of dynamic CPPA portfolios to meet an RPPT. The optimal MDP policy is intractable to compute but possesses the following key properties: (i) its decisions account for stochastic prices and supply, (ii) it captures the timing flexibility to enter CPPAs, and (iii) it can sign CPPAs with different tenures. We develop forecast-based reoptimization heuristics and a novel information-relaxation based reoptimization approach that sacrifice and approximate, respectively, the first property of the MDP policy and capture the remaining properties. We perform an extensive computational study on realistic procurement instances to uncover managerial insights related to procurement costs, the control of risks arising from supply uncertainty, the relevance of CPPAs as markets evolve, and the near-optimality of rolling power purchases from our information-relaxation based procurement heuristic.
en_US
dc.format
application/pdf
en_US
dc.language.iso
en
en_US
dc.publisher
IVT, ETH Zurich
en_US
dc.rights.uri
http://rightsstatements.org/page/InC-NC/1.0/
dc.title
Meeting corporate renewable power targets
en_US
dc.type
Working Paper
dc.rights.license
In Copyright - Non-Commercial Use Permitted
ethz.journal.title
TS Working Papers
ethz.size
51 p.
en_US
ethz.publication.place
Zurich
en_US
ethz.publication.status
published
en_US
ethz.leitzahl
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02115 - Dep. Bau, Umwelt und Geomatik / Dep. of Civil, Env. and Geomatic Eng.::02610 - Inst. f. Verkehrspl. u. Transportsyst. / Inst. Transport Planning and Systems::09611 - Corman, Francesco / Corman, Francesco
en_US
ethz.leitzahl
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02100 - Dep. Architektur / Dep. of Architecture::02655 - Netzwerk Stadt u. Landschaft ARCH u BAUG / Network City and Landscape ARCH and BAUG
*
ethz.leitzahl.certified
ETH Zürich::00002 - ETH Zürich::00012 - Lehre und Forschung::00007 - Departemente::02115 - Dep. Bau, Umwelt und Geomatik / Dep. of Civil, Env. and Geomatic Eng.::02610 - Inst. f. Verkehrspl. u. Transportsyst. / Inst. Transport Planning and Systems::09611 - Corman, Francesco / Corman, Francesco
en_US
ethz.relation.isNewVersionOf
https://hdl.handle.net/20.500.11850/315242
ethz.date.deposited
2020-10-27T11:27:27Z
ethz.source
FORM
ethz.eth
yes
en_US
ethz.availability
Open access
en_US
ethz.rosetta.installDate
2020-10-27T12:06:23Z
ethz.rosetta.lastUpdated
2025-02-13T22:18:59Z
ethz.rosetta.versionExported
true
ethz.COinS
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Working Paper [6072]