TY - GEN
T1 - A quantitative evaluation of capacity remuneration mechanisms in Europe
AU - Zappa, William
AU - Mulder, Teun
AU - Junginger, Martin
AU - Van Den Broek, Machteld
PY - 2018/6
Y1 - 2018/6
N2 - © 2018 IEEE. With the growing penetration of zero-marginal-cost wind and solar photovoltaics leading to falling electricity wholesale prices in the energy-only market, several European countries have implemented capacity remuneration mechanisms (CRMs) in an attempt to ensure security of supply (SoS). However, the literature is far from conclusive whether CRMs are indeed a necessary and/or cost-effective way of ensuring SoS. In this study, we quantitatively compare three different market designs under different levels of wind and PV growth for the interconnected systems of Germany, France, Belgium and the Netherlands. Preliminary results show that average electricity prices decrease in markets supplemented with a CRM, as does the volatility of electricity prices. Whether or not the contribution of a CRM to SoS is worth the cost (and its possible adverse impact on energy market functioning) of implementing a CRM also remains to be evaluated.
AB - © 2018 IEEE. With the growing penetration of zero-marginal-cost wind and solar photovoltaics leading to falling electricity wholesale prices in the energy-only market, several European countries have implemented capacity remuneration mechanisms (CRMs) in an attempt to ensure security of supply (SoS). However, the literature is far from conclusive whether CRMs are indeed a necessary and/or cost-effective way of ensuring SoS. In this study, we quantitatively compare three different market designs under different levels of wind and PV growth for the interconnected systems of Germany, France, Belgium and the Netherlands. Preliminary results show that average electricity prices decrease in markets supplemented with a CRM, as does the volatility of electricity prices. Whether or not the contribution of a CRM to SoS is worth the cost (and its possible adverse impact on energy market functioning) of implementing a CRM also remains to be evaluated.
KW - Power generation economics
KW - Power system economics
KW - Power system reliability
KW - Power system simulation
UR - http://www.scopus.com/inward/record.url?scp=85055587767&partnerID=8YFLogxK
U2 - 10.1109/EEM.2018.8469833
DO - 10.1109/EEM.2018.8469833
M3 - Conference contribution
AN - SCOPUS:85055587767
T3 - International Conference on the European Energy Market, EEM
BT - 2018 15th International Conference on the European Energy Market, EEM
PB - IEEE
T2 - International Conference on the European Energy Market (EEM)
Y2 - 27 June 2018 through 29 June 2018
ER -