IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v112y2019icp253-262.html

De-rating of wind and solar resources in capacity mechanisms: A review of international experiences

Author

Listed:
  • Mastropietro, Paolo
  • Rodilla, Pablo
  • Batlle, Carlos

Abstract

Non-conventional renewable energy technologies are already a key element in the expansion of many power systems. These resources, whose deployment was fostered through different types of support mechanisms in the last decades, must now be integrated as much as possible in all the segments of the electricity market. Where capacity mechanisms are in place, renewable technologies should be involved in these mechanisms in the same way as any other technology. Renewables would thus not only be able to receive a capacity remuneration, but would also be subject to the commitments that a capacity contract entails.

Suggested Citation

  • Mastropietro, Paolo & Rodilla, Pablo & Batlle, Carlos, 2019. "De-rating of wind and solar resources in capacity mechanisms: A review of international experiences," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 253-262.
  • Handle: RePEc:eee:rensus:v:112:y:2019:i:c:p:253-262
    DOI: 10.1016/j.rser.2019.05.053
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032119303764
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.rser.2019.05.053?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. repec:aen:eeepjl:eeep6-1-mastropietro is not listed on IDEAS
    2. Neuhoff, Karsten & De Vries, Laurens, 2004. "Insufficient incentives for investment in electricity generations," Utilities Policy, Elsevier, vol. 12(4), pages 253-267, December.
    3. Gouveia, João Pedro & Dias, Luís & Martins, Inês & Seixas, Júlia, 2014. "Effects of renewables penetration on the security of Portuguese electricity supply," Applied Energy, Elsevier, vol. 123(C), pages 438-447.
    4. Finon, Dominique & Pignon, Virginie, 2008. "Electricity and long-term capacity adequacy: The quest for regulatory mechanism compatible with electricity market," Utilities Policy, Elsevier, vol. 16(3), pages 143-158, September.
    5. Voorspools, Kris R. & D'haeseleer, William D., 2006. "An analytical formula for the capacity credit of wind power," Renewable Energy, Elsevier, vol. 31(1), pages 45-54.
    6. Nguyen, Christy & Ma, Chunbo & Hailu, Atakelty & Chalak, Morteza, 2016. "Factors influencing calculation of capacity value of wind power: A case study of the Australian National Electricity Market (NEM)," Renewable Energy, Elsevier, vol. 90(C), pages 319-328.
    7. Karsten Neuhoff & Laurens De Vries, 2004. "Insufficient Incentives for Investment," Working Papers EP42, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    8. Mosadeghy, Mehdi & Yan, Ruifeng & Saha, Tapan Kumar, 2016. "Impact of PV penetration level on the capacity value of South Australian wind farms," Renewable Energy, Elsevier, vol. 85(C), pages 1135-1142.
    9. Foley, A.M. & Ó Gallachóir, B.P. & McKeogh, E.J. & Milborrow, D. & Leahy, P.G., 2013. "Addressing the technical and market challenges to high wind power integration in Ireland," Renewable and Sustainable Energy Reviews, Elsevier, vol. 19(C), pages 692-703.
    10. Rodilla, P. & Batlle, C., 2012. "Security of electricity supply at the generation level: Problem analysis," Energy Policy, Elsevier, vol. 40(C), pages 177-185.
    11. Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
    12. Batlle, Carlos & Barroso, Luiz A. & Pérez-Arriaga, Ignacio J., 2010. "The changing role of the State in the expansion of electricity supply in Latin America," Energy Policy, Elsevier, vol. 38(11), pages 7152-7160, November.
    13. Mastropietro, Paolo & Batlle, Carlos & Barroso, Luiz A. & Rodilla, Pablo, 2014. "Electricity auctions in South America: Towards convergence of system adequacy and RES-E support," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 375-385.
    14. Botero B, Sergio & Isaza C, Felipe & Valencia, Adriana, 2010. "Evaluation of methodologies for remunerating wind power's reliability in Colombia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(7), pages 2049-2058, September.
    15. repec:aen:journl:ej38-si1-bothwell is not listed on IDEAS
    16. Council on Food Agricultural and Resource Economics, C-FARE, "undated". "2015 Annual Report," C-FARE Reports 260839, Council on Food, Agricultural, and Resource Economics (C-FARE).
    17. Batlle, C. & Rodilla, P., 2010. "A critical assessment of the different approaches aimed to secure electricity generation supply," Energy Policy, Elsevier, vol. 38(11), pages 7169-7179, November.
    18. repec:aen:eeepjl:2_2_a02 is not listed on IDEAS
    19. Huntington, Samuel C. & Rodilla, Pablo & Herrero, Ignacio & Batlle, Carlos, 2017. "Revisiting support policies for RES-E adulthood: Towards market compatible schemes," Energy Policy, Elsevier, vol. 104(C), pages 474-483.
    20. Milligan, Michael & Porter, Kevin, 2006. "The Capacity Value of Wind in the United States: Methods and Implementation," The Electricity Journal, Elsevier, vol. 19(2), pages 91-99, March.
    21. Kozlova, Mariia & Collan, Mikael, 2016. "Modeling the effects of the new Russian capacity mechanism on renewable energy investments," Energy Policy, Elsevier, vol. 95(C), pages 350-360.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Paul Simshauser, 2025. "Are gas turbines 'bankable' in transitioning energy-only markets?," Working Papers EPRG2601, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    2. Sanchez Jimenez, I. & Bruninx, K. & de Vries, L.J., 2025. "Capacity remuneration mechanisms for decarbonized power systems," Applied Energy, Elsevier, vol. 391(C).
    3. Wang, Jiahua & Wu, Jiang & Zhou, Yuzhou & Shao, Zhentong, 2025. "Capacity adequacy assessment and pricing for power systems with high penetration of renewable energy," Applied Energy, Elsevier, vol. 396(C).
    4. Ahmed Gailani & Maher Al-Greer & Michael Short & Tracey Crosbie & Nashwan Dawood, 2020. "Lifetime Degradation Cost Analysis for Li-Ion Batteries in Capacity Markets using Accurate Physics-Based Models," Energies, MDPI, vol. 13(11), pages 1-21, June.
    5. Kozlova, Mariia & Huhta, Kaisa & Lohrmann, Alena, 2023. "The interface between support schemes for renewable energy and security of supply: Reviewing capacity mechanisms and support schemes for renewable energy in Europe," Energy Policy, Elsevier, vol. 181(C).
    6. Brito-Pereira, Paulo & Rodilla, Pablo & Mastropietro, Paolo & Batlle, Carlos, 2022. "Self-fulfilling or self-destroying prophecy? The relevance of de-rating factors in modern capacity mechanisms," Applied Energy, Elsevier, vol. 314(C).
    7. Mariia Kozlova & Alena Lohrmann, 2021. "Steering Renewable Energy Investments in Favor of Energy System Reliability: A Call for a Hybrid Model," Sustainability, MDPI, vol. 13(24), pages 1-18, December.
    8. Kozlova, M. & Overland, I., 2022. "Combining capacity mechanisms and renewable energy support: A review of the international experience," Renewable and Sustainable Energy Reviews, Elsevier, vol. 155(C).
    9. Brito-Pereira, Paulo & Mastropietro, Paolo & Rodilla, Pablo & Barroso, Luiz Augusto & Batlle, Carlos, 2022. "Adjusting the aim of capacity mechanisms: Future-proof reliability metrics and firm supply calculations," Energy Policy, Elsevier, vol. 164(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Keppler, Jan Horst & Quemin, Simon & Saguan, Marcelo, 2022. "Why the sustainable provision of low-carbon electricity needs hybrid markets," Energy Policy, Elsevier, vol. 171(C).
    2. Mastropietro, Paolo & Herrero, Ignacio & Rodilla, Pablo & Batlle, Carlos, 2016. "A model-based analysis on the impact of explicit penalty schemes in capacity mechanisms," Applied Energy, Elsevier, vol. 168(C), pages 406-417.
    3. Heidarizadeh, Mohammad & Ahmadian, Mohammad, 2019. "Capacity certificate mechanism: A step forward toward a market based generation capacity incentive," Energy, Elsevier, vol. 172(C), pages 45-56.
    4. Roques, Fabien & Finon, Dominique, 2017. "Adapting electricity markets to decarbonisation and security of supply objectives: Toward a hybrid regime?," Energy Policy, Elsevier, vol. 105(C), pages 584-596.
    5. Simshauser, Paul, 2019. "Missing money, missing policy and Resource Adequacy in Australia's National Electricity Market," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    6. Simshauser, Paul, 2020. "Merchant renewables and the valuation of peaking plant in energy-only markets," Energy Economics, Elsevier, vol. 91(C).
    7. Brito-Pereira, Paulo & Rodilla, Pablo & Mastropietro, Paolo & Batlle, Carlos, 2022. "Self-fulfilling or self-destroying prophecy? The relevance of de-rating factors in modern capacity mechanisms," Applied Energy, Elsevier, vol. 314(C).
    8. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2018. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Working Paper Series in Production and Energy 27, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    9. Zapata, Sebastian & Castaneda, Monica & Franco, Carlos Jaime & Dyner, Isaac, 2019. "Clean and secure power supply: A system dynamics based appraisal," Energy Policy, Elsevier, vol. 131(C), pages 9-21.
    10. Paul Simshauser, 2020. "Merchant utilities and boundaries of the firm: vertical integration in energy-only markets," Working Papers EPRG2008, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    11. de Vries, Laurens & Heijnen, Petra, 2008. "The impact of electricity market design upon investment under uncertainty: The effectiveness of capacity mechanisms," Utilities Policy, Elsevier, vol. 16(3), pages 215-227, September.
    12. Sebastian Schäfer & Lisa Altvater, 2019. "On the functioning of a capacity market with an increasing share of renewable energy," Journal of Regulatory Economics, Springer, vol. 56(1), pages 59-84, August.
    13. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2019. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Energy Economics, Elsevier, vol. 80(C), pages 1059-1078.
    14. Rodilla, Pablo & García-González, Javier & Baíllo, Álvaro & Cerisola, Santiago & Batlle, Carlos, 2015. "Hydro resource management, risk aversion and equilibrium in an incomplete electricity market setting," Energy Economics, Elsevier, vol. 51(C), pages 365-382.
    15. Rodilla, P. & Batlle, C., 2012. "Security of electricity supply at the generation level: Problem analysis," Energy Policy, Elsevier, vol. 40(C), pages 177-185.
    16. Nelson, Tim & Reid, Cameron & McNeill, Judith, 2015. "Energy-only markets and renewable energy targets: Complementary policy or policy collision?," Economic Analysis and Policy, Elsevier, vol. 46(C), pages 25-42.
    17. Mastropietro, Paolo & Rodilla, Pablo & Rivier, Michel & Batlle, Carlos, 2024. "Reliability options: Regulatory recommendations for the next generation of capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 185(C).
    18. Han Shu & Jacob Mays, 2022. "Beyond capacity: contractual form in electricity reliability obligations," Papers 2210.10858, arXiv.org.
    19. Simshauser, Paul & Tian, Yuan & Whish-Wilson, Patrick, 2015. "Vertical integration in energy-only electricity markets," Economic Analysis and Policy, Elsevier, vol. 48(C), pages 35-56.
    20. Simshauser, Paul, 2018. "On intermittent renewable generation & the stability of Australia's National Electricity Market," Energy Economics, Elsevier, vol. 72(C), pages 1-19.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:rensus:v:112:y:2019:i:c:p:253-262. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.