
studied the pricing of electricity produced from coastal wind farms using the data gathered from 35 projects in Europe, China and the United States of America, and computed the breakeven price of this type of electricity. There is an extensive literature on the electricity pricing in different parts of the world, and more specifically on pricing of wind power. In Iran’s current electricity market, however, per kilowatt price of wind electricity is being computed without any incentive to motivate private investment, so the pricing method actually impedes the development of this sector. Nevertheless, renewable electricity purchase prices need to be higher than conventional electricity prices of the same market so that producers remain interested in further investment in renewable electricity generation. This association also applies to wind energy, so proper wind power pricing leads to a stable power generation sector and better motivation and organization of small and large generators participating in renewable power generation efforts. In addition, there is a close association between price, consumption, and sectorial development. Price is a numerical quantity representing the value of a commodity relative to others, so pricing of a product may serve as an incentive for both investors and consumers. It is important to note that there are six major methods of electricity pricing, including: flat rate, United Nations’ method, Long Run Marginal Cost (LRMC, the cost imposed on the system per kW increase in consumption), social welfare optimization subject to market balance constraints, market clearing price (the intersection of supply and applicant functions), and cost-based pricing. The second approach is based on the use of modern smart methods that allow the generators to introduce time-varying electricity tariffs. In the traditional approach, some researchers believe in Marginal Cost Pricing while others believe in monopoly of production side. There are two approaches to electricity pricing. In general, electricity pricing is a function of three groups of factors: organizational factors, customer factors, and market factors. Renewable energy pricing is identical to fossil energy pricing except that it also takes account of environmental impacts of fossil fuel. It has been shown that pricing is one of the key factors of promotion and success of renewable energies. This practice is relatively new in Iran and investment in this sector under current situation is not cost-effective. In the past 15 years, guaranteed purchase of renewable electricity has been as common support measure in many countries. Despite the high potentials of a variety of renewable energies in Iran, inadequate pricing and access to relatively cheap oil and gas resources have impeded the progress of renewable energies in this country. Recent years have witnessed a steady increase in the share of renewable energies in the world’s energy portfolio an increase that has contributed not only to reduction of greenhouse gas emissions but also to diversification and security of energy supplies and growth of business and employment in renewable energy industry. The proposed mathematical model was found to have sufficient capability in determination of optimal wind power price. The results showed that the optimal wind power price resulting from construction of 1, 2, and 3 are 0.159, 0.151, and 0.140 $ per kilowatt, respectively.
#Mathematical equations homer energy results software#
Simulation of construction of wind power plants in each mode was conducted in the software Homer. The modes considered in optimization were the construction of 1, 2, and 3 wind power plants in the study areas. The optimal wind power prices were then determined in three different modes by solving the mathematical model with MATLAB. First, the inputs of the mathematical model were obtained by technical–economic feasibility evaluation of the study areas in the software Homer using the 10-year wind speed data (2006–2016). The proposed model is based on nine features including construction cost, side costs (cost of replacement, maintenance, and repairs), pollution, electricity generation, profit, renewability level, green economy, rate of return on investment, and consumption. This study aimed to provide a mathematical model for the determination of optimal wind power price in the case of construction of new off-grid-connected wind power plants in different areas.
