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Market design for a high-renewables European electricity system

Author

Listed:
  • David Newbery

    (Energy Policy Research Group (EPRG) Judge Business School & Faculty of Economics Cambridge University)

  • Michael Pollitt

    (Energy Policy Research Group (EPRG) Judge Business School & Faculty of Economics Cambridge University)

  • Robert Ritz

    (Energy Policy Research Group (EPRG) Judge Business School & Faculty of Economics Cambridge University)

  • Wadim Strielkowski

    (Energy Policy Research Group (EPRG) Judge Business School & Faculty of Economics Cambridge University)

Abstract

This paper presents a set of policy recommendations for the market design of a future European electricity system characterized by a dominant share of intermittent renewable energy supply (RES), in line with the stated targets of European governments. We discuss the market failures that need to be addressed to accommodate RES in liberalized electricity markets, review the evolution of the EU's RES policy mechanisms, and summarize the key market impacts of RES to date. We then set out economic principles for market design and use these to develop our policy recommendations. Our analysis covers the value of interconnection and market integration, electricity storage, the design of RES support mechanisms, distributed generation and network tariffs, the pricing of electricity and flexibility as well as long-term contracting and risk management.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David Newbery & Michael Pollitt & Robert Ritz & Wadim Strielkowski, 2017. "Market design for a high-renewables European electricity system," Working Papers EPRG 1711, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1711
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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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