The Impact of PV Power Plants Implementation on Electricity Cost and Shadow Price Minimization

Document Type


Publication Date

Spring 3-6-2020


The increase reliance on competitive electricity market has led to widespread research to reallocate energy sources and minimize the price of energy and the services related to it. The main issues that faces the design of any energy market, is thehigh cost of generation and the high shadow pricesthat highly impacts the consumers.Also,achieving the supply-demand balance and minimization of the transmission congestion is a vital goal while planning. In this paper, a transparent and open competitive market is attained. In order to control the electricity market and reduce the market clearing price, this study proposed introducing renewable energy power plants which has lower electricity generation cost in comparison with the conventional power plants.Minimization of the shadow price is achieved by dividing the electricity grid into multiple regions. Every region has a different shadow price depending on the load demand and the power plants available to supply the demand at this region. Where,the market clearing price of each region is set as the price of generation of the highest power plant sharing in supplying the load demand at this region. This methodology is applied on the Egyptian unified power network.Sizing and allocation of the renewable energy power plants is studied carefully from the technical and economical point of view to maximize the benefit and minimize the overall cost function and shadow price.