When Low Market Values Are No Bad News: On the Coordination of Renewable Support and Real-Time Pricing

Michael Pahle, Wolf-Peter Schill, Christian Gambardella and Oliver Tietjen

No 1507, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: We analyze the interactions between different renewable support schemes and the benefits of real-time pricing (RTP) using a stylized economic model with a detailed demand-side representation calibrated to the German market. We find that there are considerable differences between a market premium on energy and capacity regarding wholesale prices, support levies and market values, which are all related to induced negative wholesale prices in case of the former. This comes along with overall higher welfare as it allows RTP consumers to increase their consumption in periods of high renewable availability. Moreover, increasing RTP shares also incurs higher welfare gains in case of a premium on energy, with the deployment-relevant group of consumers that switch from a flat-rate tariff to RTP benefiting most. Our analysis thus puts the widespread notion that higher market values are instrumental for the deployment of high shares of RES into perspective.

Keywords: RES support schemes; demand side response; market value; negative prices; Germany (search for similar items in EconPapers)
JEL-codes: D02 Q21 Q28 Q42 Q58 (search for similar items in EconPapers)
Pages: 24 p.
Date: 2015
New Economics Papers: this item is included in nep-agr, nep-ene and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.diw.de/documents/publikationen/73/diw_01.c.514132.de/dp1507.pdf (application/pdf)

Related works:
Journal Article: Renewable Energy Support, Negative Prices, and Real-time Pricing (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp1507

Access Statistics for this paper

More papers in Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by Bibliothek ().