Development of feedback control for energy policy design to guarantee sustainable solar and wind power investment growth

Energy transition in the power sector is one of the main pathways to achieving the climate targets. In order to stimulate renewable power development, regulatory policies play a vital role. However, these policies have so far attained only partial results or unexpected consequences due to the unsuitable designs. Therefore, the study addresses the question, “How do regulatory policies have to be designed in order to create a favorable environment for renewable power development?” This work proposes to use feedback control theory for energy policy design, focuses on price mechanism design to guarantee sustainable renewable power investment growth. The feedback-based price mechanism (FPM) is regularly adjusted based on the observed investment volume rather than the predicted one. Due to the popularity and applicability of the proportional-integral-derivative controller (PID) in the absence of a system model, this technique is chosen for price mechanism design. Accordingly, the controller minimizes the deviation between the desired installed capacity and the actual volume by applying proportional, integral, and derivative terms. The most forward-looking and valuable contribution of this dissertation is the development of the mathematical models of feedback-based price mechanisms. Specifically, the PID-based price mechanisms are formulated in discrete econometric models. The controller parameters are realized through historical analysis using the historical example of renewable policy-making in Germany as a case study. We conclude that frequency and level of price adjustment are crucial for an effective feedback-based price mechanism. The results of this study provide a good reference for policymakers for designing energy policies and conducting relevant studies.