International audienceThis paper studies wind power development within electricity markets with a significant carbon price as the sole incentive. Simulation of electricity market and investment decisions by System Dynamics modelling is used to trace the evolution of the electricity generation mix over a 20-year period from an initially thermal system. A range of carbon prices is tested to determine the value above which market-driven development of wind power becomes economically possible. This requires not only economic competitiveness in terms of cost-price, but also profitability versus traditional fossil-fuel technologies. Results stress that wind power is profitable for investors only if the carbon price is significantly higher than the price required for making wind power MWh's cost-price competitive on the basis of levelized costs. In this context, the market-driven development of wind power seems only possible if there is a strong commitment to climate policy, reflected in a stable and high carbon price. Moreover, market driven development of wind power becomes more challenging if nuclear is part of investment options
The European Union (EU) has launched several initiatives to foster further integration between power systems of member states. In practice, integrating neighboring systems requires both infrastructures and appropriate organizations to use these infrastructures, such as cross-border congestion management mechanisms. Sometimes, these two parts are referred as the hardware and software of the integration, highlighting with this metaphor that they complement each another. The guiding objective of this paper is to formalize this distinction to help analyze the integration process and strengthen economic assessment of any integration policy.This paper provides (a) a definition of the two modules and their common goal; (b) a proof through empirical observations that the distinction between the two modules is meaningful for policy assessment; (c) a description of the interactions between the two modules in a simple case; and (d) policy recommendations related to resource allocation for further integration.
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