Optimal energy portfolio allocation method for regulable hydropower plants considering the impact of new energy generation

Abstract

With the growing penetration of new energy sources, the impact of new energy generation on the income of the energy portfolio is becoming more significant. This paper proposes a risk measurement method based on the Conditional Value-at-Risk (CVaR) approach to measure the income risk from new energy generation on the energy portfolio. The superiority is proved by comparing it with the method only considering spot price fluctuations. Then, we constructed an energy allocation model of the hydropower plant to maximize the combined income-risk utility. In solving the optimal allocation of the energy portfolio, the effects of inflow and water level on the risk aversion parameters of the hydropower plant are considered. The results and comparison show that the proposed risk measurement method increases the income of the energy portfolio by 12%, and the proposed risk aversion parameter’s adjustment strategy can increase the income of the energy portfolio by 5.8% and reduces the CVaR value by 14.5%. Moreover, the method that considers the income risk from new energy generation can provide favorable conditions for improved new energy accommodation and safe operation of the system.