IDEAS home Printed from https://ideas.repec.org/p/thk/wpaper/inetwp193.html
   My bibliography  Save this paper

Separating electricity from gas prices through Green Power Pools: Design options and evolution

Author

Listed:
  • Michael Grubb

    (University College London, Institute of Sustainable Resources)

  • Paul Drummond

    (University College London, Institute of Sustainable Resource)

  • Serguey Maximov

    (University College London, Institute of Sustainable Resource)

Abstract

This paper develops a detailed proposal for an efficient way to channel the value of large-scale renewables, which have become much cheaper than gas-driven wholesale electricity prices, to consumers at 'cost-plus' prices. This would reduce the fiscal pressure on governments for market-wide subsidies and offer more stable support for consumers most in need. We detail how this 'green power pool' approach could interact with the wholesale market to ensure firm power, also bringing transparency to the cost of balancing the variable renewables output, and maintaining incentives for efficient supply and demand responses. We illustrate the approach with reference to the cost and volume trajectories of UK renewables backed by government CfDs, targeted initially to particular consumer groups, as a first step in a wider transition towards direct consumer access to cheap renewables.

Suggested Citation

  • Michael Grubb & Paul Drummond & Serguey Maximov, 2022. "Separating electricity from gas prices through Green Power Pools: Design options and evolution," Working Papers Series inetwp193, Institute for New Economic Thinking.
    • Handle: RePEc:thk:wpaper:inetwp193
    DOI: 10.36687/inetwp193
    as

    Download full text from publisher

    File URL: https://doi.org/10.36687/inetwp193
    File Function: First version, 2022
    Download Restriction: no
    File URL: https://libkey.io/10.36687/inetwp193?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
    ---><---

    Citations

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


    Cited by:

    1. Hugo Algarvio & António Couto & Ana Estanqueiro, 2024. "RES.Trade: An Open-Access Simulator to Assess the Impact of Different Designs on Balancing Electricity Markets," Energies, MDPI, vol. 17(24), pages 1-18, December.
    2. João Passagem dos Santos & Hugo Algarvio, 2025. "A Machine Learning Model for Procurement of Secondary Reserve Capacity in Power Systems with Significant vRES Penetrations," Energies, MDPI, vol. 18(6), pages 1-19, March.
    3. Hugo Algarvio & Vivian Sousa, 2025. "Strategic Bidding to Increase the Market Value of Variable Renewable Generators in New Electricity Market Designs," Energies, MDPI, vol. 18(11), pages 1-18, May.
    4. Hugo Algarvio, 2023. "The Economic Sustainability of Variable Renewable Energy Considering the Negotiation of Different Support Schemes," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    5. Vivian Sousa & Hugo Algarvio, 2025. "Strategic Bidding to Increase the Market Value of Variable Renewable Generators in Electricity Markets," Energies, MDPI, vol. 18(7), pages 1-22, March.
    6. repec:diw:diwwpp:dp2035 is not listed on IDEAS
    7. Daniel Navia Simon & Laura Diaz Anadon, 2025. "Power price stability and the insurance value of renewable technologies," Nature Energy, Nature, vol. 10(3), pages 329-341, March.
    8. Hugo Algarvio & Vivian Sousa, 2025. "Strategies to Incentivize the Participation of Variable Renewable Energy Generators in Balancing Markets," Energies, MDPI, vol. 18(11), pages 1-23, May.
    9. Delardas, Orestis, 2025. "Transforming marginal-cost pricing: A blockchain approach to fundamental energy system dynamics," Utilities Policy, Elsevier, vol. 95(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:thk:wpaper:inetwp193. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Pia Malaney (email available below). General contact details of provider: https://edirc.repec.org/data/inetnus.html .

    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.