Market design for a high-renewables European electricity system
David M Newbery (),
Michael Pollitt (),
Robert Ritz and
Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge
This paper presents a set of policy recommendations for the market design of a future European electricity system characterized by a dominant share of intermittent renewable energy supply (RES), in line with the stated targets of European governments. We discuss the market failures that need to be addressed to accommodate RES in liberalized electricity markets, review the evolution of the EU's RES policy mechanisms, and summarize the key market impacts of RES to date. We then set out economic principles for market design and use these to develop our policy recommendations. Our analysis covers the value of interconnection and market integration, electricity storage, the design of RES support mechanisms, distributed generation and network tariffs, the pricing of electricity and flexibility as well as long-term contracting and risk management.
Keywords: Electricity markets; wholesale market design; renewable energy; interconnection; electricity storage; long-term contracts; capacity markets (search for similar items in EconPapers)
JEL-codes: H23 L94 Q28 Q48 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-des, nep-ene, nep-eur and nep-reg
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Journal Article: Market design for a high-renewables European electricity system (2018)
Working Paper: Market design for a high-renewables European electricity system (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:cam:camdae:1726
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