The Impact of Renewable Portfolio Standard Policy on Microgrid System

Abstract

China's renewable energy policy is gradually transiting from subsidies to Renewable Portfolio Standard (RPS) policy. This paper establishes a two-stage game model consisting of prosumers and the grid in microgrid system under PRS policy. It is found that the social welfare shows an inverted "u" with increasing penalty and prosumers demand. The prosumers can be profitable only when the production cost factor is lower than the boundary value. Government can implement the RPS policy first in areas with lower production costs. Lower price for green certificates and mid-level penalty effectively incentive green energy production and consumption in microgrids. Government needs to control the price of green certificates to implement RPS successfully.