Speaker: Owen Wu, Indiana University
Date & Time: November 12, 2021, Friday, 17:00
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Abstract: Over 97% of the power generation capacity to be installed from
2021 to 2050 in the U.S. is expected to be powered by wind, solar, and natural gas. Meanwhile, large-scale battery systems are planned to support the power systems. It is paramount that policy makers and electric utilities understand the operational and investment relations among the renewable (wind and solar), flexible (natural gas), and storage capacities. In this paper, we optimize the joint operations of these three types of resources and identify the structure of the optimal operating policy--in particular, the optimal storage control policy.
Furthermore, we optimize the investment mix of these resources and examine the investment relations among them (i.e., investment substitutes or complements). We explain the investment relations using the operational insights obtained from the storage control policy. We find that whether renewable capacity and storage are complements or substitutes depends on how storage creates value and whether storage value is constrained by charging or discharging. We also find that both renewable capacity and storage are substitutes for flexible capacity.
Through extensive numerical analysis using data from a Florida utility, government agencies, and industry reports, we demonstrate how storage operations drive the investment relations among these resources.
Bio: Owen Wu is an Associate Professor of Operations and Decision Technologies at the Kelley School of Business, Indiana University. His research focuses on energy sustainability and socially responsible operations, including integrating and promoting renewable energy resources, building and operating energy storage facilities, investing in energy efficiency and infrastructure, as well as managing assistance programs in humanitarian operations. His research also includes empirical analysis on inventory management and financial performance, and on energy portfolio and risk management at corporations. Prof. Wu received the Paul Kleindorfer Award in Sustainability by the Production and Operations Management Society. He also received MBA Teaching Excellence Award, Doctoral Distinguished Teaching Award, and Trustee Teaching Award. He is currently Vice President of the MSOM Society, and on the editorial board of Manufacturing & Service Operations Management and Production and Operations Management.
Before joining Indiana University, Prof. Wu was an Assistant Professor at the University of Michigan from 2006 to 2014. He earned his Ph.D.
degree from the University of British Columbia, M.Eng. degree from Hong Kong University of Science and Technology, and B.Eng. degree from Shanghai Jiao Tong University.