Global Assessment of the Merit-Order Effect and Revenue Cannibalisation for Variable Renewable Energy

Halttunen, Krista; Staffell, Iain; Slade, Raphael; Green, Richard; Saint‐Drenan, Yves‐Marie; Jansen, Malte

doi:10.2139/ssrn.3741232

Cited by 9 publications

(3 citation statements)

References 39 publications

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“…It is well known that increased amounts of variable renewable energy sources (RES) in the power system depress market clearing prices through the so-called 'merit-order effect', e.g. see (Sensfuß et al, 2008;Cludius et al, 2014;Ketterer, 2014;Ackermann et al, 2015;Bird et al, 2016;Djørup et al, 2018;Brown and Reichenberg, 2020;Halttunen et al, 2020).…”

Section: Merit-order Effect In Short To Medium-term Systemsmentioning

confidence: 99%

“…The number of hours with zero market clearing prices due to curtailment is often expected to increase. Due to a combination of factors such as congestion, start-up and shut-down costs of thermal plants, and fixed feed-in tariffs for RES, several markets are already today experiencing some periods with zero or negative prices (Ketterer, 2014;Ackermann et al, 2015;Bird et al, 2016;Djørup et al, 2018;Halttunen et al, 2020). Many occurrences of zero and negative prices should be possible to be avoided by better grid planning, better flexibility products in the market, and 2016; Johnson and Oliver, 2019), we are going to analyse the effect of cross-sectoral demand bidding for the price formation in future electricity markets.…”

Section: Merit-order Effect In Short To Medium-term Systemsmentioning

confidence: 99%

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On Wholesale Electricity Prices and Market Values in a Carbon-Neutral Energy System

Böttger¹,

Härtel²

2021

Preprint

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Climate and energy policy targets of the European Commission aim to make Europe the first climate-neutral continent by 2050. For low-carbon and net-neutral energy systems primarily based on variable renewable power generation, issues related to the market integration, cannibalisation of revenues, and cost recovery of wind and solar photovoltaics have become major concerns. The traditional discussion of the merit-order effect expects wholesale power prices in a system with 100 % renewable energy sources to alternate between very high and very low values. Unlike previous work, we present a structured and technology-specific analysis of the cross-sectoral demand bidding effect for the price formation in low-carbon power markets. Starting from a stylised market arrangement and by successively augmenting it with all relevant technologies, we construct and quantify the cross-sectoral demand bidding effects in future European power markets with the cross-sectoral market modelling framework SCOPE SD. As the main contribution, we explain and substantiate the market clearing effects of new market participants in detail. Hereby, we put a special focus on hybrid heat supply systems consisting of combined heat and power power plant, fuel boiler, thermal storage and electrical back up and derive the opportunity costs of these systems. Furthermore, we show the effects of cross-border integration for a large-scale European net-neutral energy scenario. Finally, the detailed information on market clearing effects allows us to evaluate the resulting revenues of all major technology categories on future electricity markets.

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Section: Merit-order Effect In Short To Medium-term Systemsmentioning

confidence: 99%

Section: Merit-order Effect In Short To Medium-term Systemsmentioning

confidence: 99%

On Wholesale Electricity Prices and Market Values in a Carbon-Neutral Energy System

Böttger¹,

Härtel²

2021

Preprint

View full text Add to dashboard Cite

show abstract

“…Annual solar radiation is lowest in northeastern (voivodeships of Warmia and Mazury, along with Podlasie) and southern Poland (Silesia, Małopolska and Podkarpacie). Poland has a similar solar power capacity to the United Kingdom, Belgium, the Netherlands, Denmark, Germany and Switzerland [15][16][17]. The energy yield from PV systems is influenced by the season (solar irradiance is highest between April and August), weather conditions, shading and the solar inclination angle.…”

Section: Introductionmentioning

confidence: 99%

Location and Technical Requirements for Photovoltaic Power Stations in Poland

2022

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The objective of Poland’s energy policy is to guarantee energy security while enhancing economic competitiveness and energy efficiency, thus minimizing the power sector’s environmental impact and optimizing the use of energy resources in the country. Poland is not the only European country to rely on coal for power generation. Historical factors and large coal deposits act as natural barriers to increasing the share of renewable energy in the Polish power sector. Yet, today, environmental concerns and climate change are prompting many countries to move away from fossil fuels. Renewable energy sources, such as solar and wind energy, are an alternative to traditional energy generated from fossil fuels. However, investors developing solar and wind farms in Poland encounter numerous problems at each stage of the project. These difficulties are associated mainly with the location, technical requirements, infrastructure and formal and legal documents. This study aimed to identify the key factors that influence the development of photovoltaic power stations in Poland, with special emphasis on the choice of location and technical aspects of the investment process. The demand for clean energy and the renewable energy prospects for Poland are discussed based on the example of solar farms. Sixty-seven prospective farm locations were analyzed, and the results of the analysis were used to identify the main barriers and opportunities for renewable energy development in Poland. The option of connecting solar farms to the existing power grid was also examined. This study demonstrates that the development of solar farms in Poland is inhibited mainly by technical barriers, in particular the lack of options for connecting farms to the power grid, as well as the absence of support mechanisms and dedicated legislative solutions, rather than environmental obstacles.

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On the Development of Wind Market Values and the Influence of Technology and Weather: a German Case Study

Engelhorn

Möbius

2022

Z Energiewirtsch

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Global Assessment of the Merit-Order Effect and Revenue Cannibalisation for Variable Renewable Energy

Cited by 9 publications

References 39 publications

On Wholesale Electricity Prices and Market Values in a Carbon-Neutral Energy System

On Wholesale Electricity Prices and Market Values in a Carbon-Neutral Energy System

Location and Technical Requirements for Photovoltaic Power Stations in Poland

On the Development of Wind Market Values and the Influence of Technology and Weather: a German Case Study

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