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Smart Energy Markets - Future electricity, gas and heating markets

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  • Sorknæs, P.
  • Lund, Henrik
  • Skov, I.R.
  • Djørup, S.
  • Skytte, K.
  • Morthorst, P.E.
  • Fausto, F.

Abstract

This paper introduces the concept of Smart Energy Markets. Sustainable smart energy systems based on renewable energy cannot be implemented without addressing the issue of how to re-design existing electricity and gas markets. Moreover, markets for heating and transport fuels will also be challenged. In recent years, the re-design of the electricity market has attracted a lot of attention and is an area of focus in research. However, the re-design of electricity markets should not be seen isolated from the re-design of other energy markets. By applying a 100% renewable energy system scenario, this paper illustrates and quantifies how future renewable heating, green gas and liquid fuel markets will influence the electricity markets and vice versa. Based on this scenario, it is found that annual average market prices on the future green gas and liquid fuel markets may potentially be affected by the electricity and heating markets by 60–120 EUR/MWh, and the heating, green gas and liquid fuel markets could influence the annual average electricity prices by up to 28 EUR/MWh. The concept of Smart Energy Markets expresses the point that mutual influences become essential in the design of future energy markets facilitating the transition into smart energy systems based on variable renewable energy.

Suggested Citation

  • Sorknæs, P. & Lund, Henrik & Skov, I.R. & Djørup, S. & Skytte, K. & Morthorst, P.E. & Fausto, F., 2020. "Smart Energy Markets - Future electricity, gas and heating markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    • Handle: RePEc:eee:rensus:v:119:y:2020:i:c:s1364032119308615
    DOI: 10.1016/j.rser.2019.109655
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