Cannibalization, depredation, and market remuneration of power plants

Juan Ignacio Peña, Rosa Rodríguez and Silvia Mayoral

Energy Policy, 2022, vol. 167, issue C

Abstract: The decarbonization strategy of the electricity sector relies on renewable energy. However, increasing renewables gives cannibalization and depredation effects. Cannibalization appears when increasing penetration of renewables undermines their own market remuneration. Depredation arises when increased renewable penetration undermines the market remuneration of other technologies. This paper documents cannibalization and depredation effects in the Spanish electricity market from 2014 to 2020. Increases in wind and solar penetration reduce market remuneration of all technologies. With wind, depredation and cannibalization effects are non-linear. Higher solar and wind penetration reduces remuneration volatility to wind, solar, and gas but increases those of coal and nuclear.

Keywords: Cannibalization effect; Depredation effect; Renewable energy; Market remuneration (search for similar items in EconPapers)
JEL-codes: C51 G13 L94 Q40 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:167:y:2022:i:c:s0301421522003111

DOI: 10.1016/j.enpol.2022.113086

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