Contract design for storage in hybrid electricity markets

Long-Term Issues with the Energy-Only Market Design in the Context of Deep Decarbonization

“…in Joskow (2022), Keppler et al (2022), Wolak (2022) and Fabra (2023) -would be particularly relevant. This includes various approaches to auction design (e.g., Iossa et al, 2022;Fabra and Montero, 2023), contract design (e.g., Billimoria and Simshauser, 2023;Newbery, 2023;Schlecht et al, 2024) and planning (e.g., Corneli, 2020;Anderson and Zachary, 2023). In this respect, accounting for realistic behavioral, informational and structural assumptions will be of the essence.…”

Marginal vs average curtailment of renewables and access conditions in Renewable Energy Zones

“…Moving beyond ~30% through to ~50%, particularly in geographically diverse and sparsely populated networks like the two outer regions of Australia's National Electricity Market, NEM (i.e. Queensland and South Australia), complex technical challenges emerge including system strength shortfalls [26], deteriorating inertia [27], sharply falling minimum loads [28], concerns over meeting reliability constraints given the prevalence of intermittent resources [29], [30] and progressive loss of thermal dispatchable plant in prior periods -at times in a disorderly manner [24], [31]- [33]. In (rarely obtained) long-run free entry equilibrium in which generators just earn a normal return [34] there will be excess entry of VRE, at least (ignoring learning spill-overs) without an entry levy to pay for the difference between marginal and average curtailment rates [3].…”