 Supporting the externality of intermittency in policies for renewable energyDerek W. Bunn and José I. Muñoz Energy Policy, 2016, vol. 88, issue C, 594-602 Abstract: We analyse the joint problem of supporting renewables and resource adequacy in a liberalised electricity market and present a detailed model-based comparison of two alternative policies. We undertake this in the context of the British market. We show how, ceteris paribus, the progressive replacement of coal with wind imposes extra costs of reserve and evaluate alternative way to meet this, whether through capacity payments funded by customers, or a reliability requirement on wind generators with capital cost or energy feed-in subsidies. We consider the reality of market concentration and the extent to which pragmatic regulation could allow prices to rise above marginal cost to reduce the extent of direct subsidies and complex market designs. We also evaluate the implied cost of carbon reduction in a progressive replacement of coal with wind, when the security is maintained by extra peaking gas. We find that support through capital allowances rather than the energy market is more efficient. Keywords: Renewable energy; Resource adequacy; Offshore wind; Green certificates; Capital grants (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:88:y:2016:i:c:p:594-602 DOI: 10.1016/j.enpol.2015.07.036 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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