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Integrating renewable energy sources into electricity markets: Power system operation, resource adequacy and market design

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  • Umberto Monarca
  • Ernesto Cassetta
  • Alessandro Sarra
  • Cesare Pozzi

Abstract

Focusing on the Italian power system, the article examines how the national regulatory framework has been modified to effectively accommodate and further increase the share of renewable energy in the energy mix while preserving system reliability. This paper argues that operational changes and regulatory measures adopted so far, which are mainly directed to create a level playing field between different energy sources, constitute a short-term response, and thus of limited effectiveness while increasing cost for consumers. To intensify the de-carbonization process of the Italian power system a more fundamental revision of the current market design is required. In this view, an essential ingredient is the future expansion of the electricity grid starting from a clear recognition of energy mix that we intend to reach in the mid/long term.

Suggested Citation

  • Umberto Monarca & Ernesto Cassetta & Alessandro Sarra & Cesare Pozzi, 2015. "Integrating renewable energy sources into electricity markets: Power system operation, resource adequacy and market design," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2015(2), pages 149-166.
    • Handle: RePEc:fan:efeefe:v:html10.3280/efe2015-002010
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    Cited by:

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    2. Cassetta, Ernesto & Meleo, Linda & Monarca, Umberto & Nava, Consuelo R., 2017. "Is the answer blowin' in the wind (auctions)? An assessment of Italian auction procedures to promote onshore wind energy," Department of Economics and Statistics Cognetti de Martiis. Working Papers 201709, University of Turin.
    3. Su, Chi-Wei & Yuan, Xi & Umar, Muhammad & Chang, Tsangyao, 2022. "Dynamic price linkage of energies in transformation: Evidence from quantile connectedness," Resources Policy, Elsevier, vol. 78(C).
    4. Bucksteeg, Michael, 2019. "Modelling the impact of geographical diversification of wind turbines on the required firm capacity in Germany," Applied Energy, Elsevier, vol. 235(C), pages 1476-1491.
    5. Cassetta, Ernesto & Nava, Consuelo R. & Zoia, Maria Grazia, 2022. "EU electricity market integration and cross-country convergence in residential and industrial end-user prices," Energy Policy, Elsevier, vol. 165(C).
    6. Jos? ?ngel Gimeno & Eva Llera Sastresa & Sabina Scarpellini, 2020. "Determinants and barriers of PV self-consumption in Spain from the perception of the installers for the promotion of distributed energy systems," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 0(1), pages 153-169.
    7. Fontana, Magda & Iori, Martina & Nava, Consuelo Rubina, 2019. "Switching behavior in the Italian electricity retail market: Logistic and mixed effect Bayesian estimations of consumer choice," Energy Policy, Elsevier, vol. 129(C), pages 339-351.

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    More about this item

    JEL classification:

    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy

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