Addressing Market Issues in Electrical Power Systems with Large Shares of Variable Renewable Energy

Magnus Korpas, Hannele Holttinen, Niina Helisto, Robin Girard, Matti Koivisto, Bethany Frew, Jan Dobschinski, J. Charles Smith, Til Kristian Vrana, Damian Flynn, Antje Orths, Lennart Soder

Research output: Chapter in Book/Report/Conference proceedingConference article in proceedingsScientificpeer-review

Abstract

This paper reports recent findings from IEA Wind TCP Task 25, which compiles international experiences and research related to large-scale integration of wind and other renewable energy. In the paper, we address the main challenges for market integration of variable renewable energy, relating to price formation, cost recovery, balancing and other grid services. The paper gives an overview of recent scenario studies on electricity price impacts of (1) various generation, energy storage and demand types in different markets, and (2) different market designs and energy/climate policies. Studying markets with very high shares of variable renewable energy requires an improved set of analysis tools for forecasting market outcomes, estimating flexibility needs and sources, and assessing resource adequacy. Key market features need to be investigated within these improved analytical capabilities for systems transitioning to high shares of variable renewable energy, storage and flexible demand. System services that can be supported by markets will likely need to be revisited. Finally, this paper identifies open questions and suggested future market design work for supporting systems with very high shares of variable renewable energy, which are to be addressed in follow-up work of Task 25 collaborative research.

Original languageEnglish
Title of host publication18th International Conference on the European Energy Market, EEM 2022
PublisherIEEE Institute of Electrical and Electronic Engineers
Number of pages8
ISBN (Electronic)978-1-66540-896-7
DOIs
Publication statusPublished - 2022
MoE publication typeA4 Article in a conference publication
Event18th International Conference on the European Energy Market, EEM 2022 - Ljubljana, Slovenia
Duration: 13 Sep 202215 Sep 2022

Conference

Conference18th International Conference on the European Energy Market, EEM 2022
Country/TerritorySlovenia
CityLjubljana
Period13/09/2215/09/22

Keywords

  • cost recovery
  • electricity prices
  • market design
  • Variable renewable energy

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