A dynamic model for distributed energy resource expansion planning considering multi-resource support schemes

• The dynamics of electricity market is modeled using the system dynamics theory.
• The proposed model helps investors to identify the long-term behavior of the market.
• Long term effects of uncertainties of electricity market is investigated.
• The effect of multi-resource regulatory support schemes on decision problem is modeled.
• Interaction of supports on each other and on penetration rate of resources are modeled.

In this paper, a system dynamics based model is developed to investigate the impacts of multi-resource regulatory policies on distributed energy resource (DER) expansion planning. DERs usually include a variety of renewable and fossil based generation technologies such as wind and gas engine resources, combined heat and power (CHP), demand response (DR) and energy storage. The intermittent nature and uncertainty in power generation of some of these resources and other uncertainties that exist in the market environment would cause investors to encounter risk in their investment decisions. Implementation of any supporting policy affects any investor’s behavior and investment level of other investors. Regulators should properly identify long-term impacts of their support policies in the energy resource expansion in order to choose a proper support scheme. These support schemes should ensure the long-term market stability. It is important for a DER investor to properly identify his/her long-term investment behavior to select an appropriate strategy. In this paper, the system dynamics method is used to investigate these issues. The impacts of various multi-resource regulatory policies on market dynamics are modeled and compared with the single-resource support schemes ones. In this study, support schemes are considered for supporting DR, wind resources, CHPs and photovoltaic resources.