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A mixed-complementarity problem approach for solving multi-sector, multi-region electricity systems in the presence of government interventions

David Wogan 1 
Abstract : The aim of this dissertation was to quantify the economic impact of connecting electricity systems in the presence of interacting, and sometimes competing, policy objectives. The GCC region was chosen because the countries are substantial energy consumers, due partly because of the government interventions in prices and quantities in the transformation and end-use sectors. This dissertation directly incorporated the role of on prices and quantity interventions in the study of energy system interconnectivity. The framework was extended to a regional energy system under autarky and cooperation to quantify the mismatch in gains among the member states with and without interventions.The mixed-complementarity problem (MCP) approach was utilized in this dissertation, which enabled price and quantity interventions of agents to appear as market clearing conditions in an equilibrium problem. The MCP formulated in this dissertation was designed specifically for a multi-sector energy system in one country, then extended to multiple interconnected countries. A recursive dynamic solution algorithm was employed to approximate lack of perfect foresight of agents in the model.The first set of results demonstrated the MCP formulation and its viability to studying price and quantity interventions in Saudi Arabia. A static analysis of the six GCC countries quantified the economic losses from heterogeneous intervention schemes in each country and how they impede electricity exchange. The multi-country, multi-period analysis (through 2030) examined how subsidy reform, electricity exchange, and carbon pricing policies interact. It was shown how sequencing subsidy reforms before implementing electricity exchange or carbon pricing is a prerequisite for producing a net economic gain.
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David Wogan. A mixed-complementarity problem approach for solving multi-sector, multi-region electricity systems in the presence of government interventions. Economics and Finance. Université de Nanterre - Paris X, 2021. English. ⟨NNT : 2021PA100060⟩. ⟨tel-03610149⟩

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