Analysis of Market Coupling Mechanism Between Distributed Photovoltaic Penetration and Electricity Market Under Background of Carbon Neutrality

Abstract

In order to evaluate the possibility of the ‘death spiral’ operation dilemma faced by the retailers with the high level penetration of distributed photovoltaic (PV) under the background of carbon neutrality, and to analyze the key factors that may lead to the ‘death spiral’, the system dynamics approach is applied for modeling. First, the model of customer-side distributed PV penetration guided by market conditions such as sales tariff is established. Then, a model of surplus of retailers is established based on the negative feedback relationship between distributed PV penetration level and the surplus of retailers. The case study evaluates the sensitivity effects of factors such as the generation of distributed PV and wholesale electricity prices on the surplus of retailers. The results show that the surplus of retailers tends to decrease slowly in the mid-long term. An extreme scenario may cause the ‘death spiral’ of retailers in which multiple factors such as transmission and distribution volumes, wholesale tariffs, and maintenance costs change significantly at the same time.

Keywords

• carbon neutrality
• distributed photovoltaic (pv)
• system dynamics
• death spiral