Policy Seminar: Impact of renewables on electricity markets
During a Policy Seminar on Thursday April 2nd, Paul Koutstaal and Ozge Ozdemir (ECN) will give a presentation "Impact of renewables on electricity markets".
Time: 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague
Presentation: Paul Koutstaal and Ozge Ozdemir (ECN)
Discussant: Annemiek Verrips (CPB)
Registration: Please register by sending an email to email@example.com.
Increasing shares of wind and solar-PV in electricity generation have a considerable impact on the electricity market. In addition to the costs of wind turbines and solar-pv panels themselves, the variable and uncertain generation from these renewables are a source of additional costs in the electricity system. These costs are, for example, the costs of back-up needed for periods with low wind and solar production or the costs of balancing the electricity system. Furthermore, electricity from wind and solar with zero marginal costs depresses electricity prices on the wholesale market, an effect that is even more pronounced for the price which wind and solar earn on the market. While these cost increases and price effects are common to all electricity markets, the magnitude of the effects will to a large extent depend on the local characteristics of an electricity market, such as the incumbent generation mix and the interconnections with other markets. Therefore, to quantify these effects for the Netherlands, we have used a detailed European electricity market model. Our results for the Netherlands are in line with the existing literature and underline the importance of interconnections in reducing the integration costs of renewables in the electricity system.
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