The impact of RES-E policy setting on integration effects - A detailed analysis of capacity expansion and dispatch results

Nicolosi, Marco (2011): The impact of RES-E policy setting on integration effects - A detailed analysis of capacity expansion and dispatch results.

Abstract

The operation of the power markets is strongly aected by the presence of high shares of electricity from renewable energy sources (RES-E) in the market. Especially in times of high RES-E infeed, rm market situations can lead to extreme results, even to negative power prices. The behavior of RES-E in potential oversupply situations depends on the RES-E support scheme and in particular on the dened curtailment rules. By now, dierent curtailment rules have not been taken into account in long-run capacity expansion analyses. The present research investigates the impact of curtailment rules on the operation and the investment decisions through the utilization of "The High Temporal Resolution Electricity Market Analysis Model" (THEA) for the German power market under consideration of the neighboring countries. In general the results show that RES-E can provide exibility to the system if low burdens for curtailment are applied. This comes with the cost of lacking market signals which could trigger investments in exible generation capacities. However, if RES-E are forced into the market at any cost, the burden for consumers increases and the market signals high demand for alternative exibilities.

• Item Type: MPRA Paper
• Language: English
• Keywords: Power market modeling, RES-E integration, curtailment rules
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q41 - Demand and Supply ; Prices; D - Microeconomics > D4 - Market Structure, Pricing, and Design > D41 - Perfect Competition; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources

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