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Intermittency and electricity retailing: An incomplete market approach

Author

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  • Jean-Henry Ferrasse

    (M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Nandeeta Neerunjun

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique, M2P2 - Laboratoire de Mécanique, Modélisation et Procédés Propres - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

  • Hubert Stahn

    (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)

Abstract

We analyze the integration of intermittent renewables-based technologies into an electricity mix comprising of conventional energy. Intermittency is modeled by a contingent electricity market and we introduce demand-side flexibility through the retailing structure. Retailers propose diversified electricity contracts at different prices, but in an insufficient number to cover intermittent production. These delivery contracts are modeled similarly to numeraire assets. We study the competitive equilibrium of the state-contingent wholesale electricity markets and the delivery contract markets. We also provide an analysis linking the delivery contracts to social welfare. Finally, we discuss the conditions under which changing the delivery contracts improve penetration of renewables and increases welfare. These provide useful insights for managing intermittency and achieving renewable capacity objectives.

Suggested Citation

  • Jean-Henry Ferrasse & Nandeeta Neerunjun & Hubert Stahn, 2022. "Intermittency and electricity retailing: An incomplete market approach," Post-Print hal-03979827, HAL.
    • Handle: RePEc:hal:journl:hal-03979827
    DOI: 10.1016/j.mathsocsci.2022.09.001
    Note: View the original document on HAL open archive server: https://hal.science/hal-03979827
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    Cited by:

    1. Nandeeta Neerunjun & Hubert Stahn, 2023. "Renewable energy support: pre-announced policies and (in)-efficiency," AMSE Working Papers 2335, Aix-Marseille School of Economics, France.
    2. Nandeeta Neerunjun & Hubert Stahn, 2023. "Renewable energy support: pre-announced policies and (in)-efficiency," AMSE Working Papers 2335, Aix-Marseille School of Economics, France.

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