FeMIWiS

The government sets targets for renewable investment (2,500 MW/year of the solar PV installation, for example) and employs the price mechanisms (feed-in tariff, for example) to drive the investment markets to achieve that objective. However, the investment decisions - yes or no, when, and how much - are made by investors. We know that most of the investors make the decisions with the expectation of profitability (internal rate of return). Profitability depends on not only the cost but also the electricity price which can be oriented by the government under FIT, auction mechanism or indirectly through the CO2 price mechanism. Thus, the government can adopt regulations to influence investment activities. However, setting an appropriate price mechanism is not easy. On the one hand, it is a tough task to predict the changes in costs of wind turbines, and solar panels accurately. On the other hand, understanding the investors, guessing their behavior are challenges. Therefore, making the regulations based on “prediction” and “guess” does not ensure to achieve the investment target.

In this research, an innovative method of investment control is studied and developed which minimizes the difference between the targeted and real installed capacity based on feedback information of “real investment” instead of “prediction numbers”. The main objective of this research is developing mathematical shapes for regulations, mainly focusing on the architecture of control systems which guarantee sustainable and robust development of wind and solar power.