Assessment of the minimum value of photovoltaic electricity in Italy

Abstract

We investigate the value of solar photovoltaic (PV) power in the Italian wholesale electricity market (IPEX). A model is developed and applied to simulate and predict the monthly average electricity prices in peak hours, as well as to simulate scenarios without PV generation. The computed merit-order effect of the PV generation in Italy, around À2.9 €/MWh per each additional GWh of PV production, as well as the greater À4.5 €/MWh absolute value evaluated under the hypothesis of stationary electricity demand, are in line with the upper values found in related studies of near mature renewable energy markets. A strong relationship of the value of PV electricity in the IPEX with the electricity demand is clearly evident, leading to important policy implications in terms of possible actions on the granted subsidies, electrification of energy end use, and promotion of specific PV technologies. The anomalous temporal behavior of the IPEX, shown by high off-peak electricity prices that followed the installation of Italy's large PV park, partly offsets the beneficial effect of PV generation.

Que faire? A Bioeconomy and Solar Energy Institute at Italy's Research Council in the Context of the Global Transition to the Solar Economy

“…The benefits of PV generation are not only environmental (drastically abating the negative environmental impact of conventional electricity production,s uch as polluting gas emissions, freshwater ecotoxicity,e utrophication and particulate-matter exposure), [14] but also economic with as ubstantial fall in the price of electricity in the Italian wholesalee lectricity market (IPEX). [15] This replicates in Italy what is being observed in Germany,w here ah uge 40 GW installed solar park (twice the PV solarc apacity in Italy) often leads to negative electricity prices, which compensates for the large renewable energy surcharge (E 0.0688 per kWh in 2017). [16] The bioeconomy,t oo, is flourishing, with the first highly innovative new companies producing high-value-added products and materials from bioresources, such as the first bioplastic companies manufacturing polyhydroxyalkanoates from biodiesel glycerol [17] or other bioplasticsf rom starch.…”

“…Covering 7.7 % of the overall electricity demand in the first five months of 2017, photovoltaic energy in Italy has the largest share in the energy mix amongst world's highly industrialised countries. The benefits of PV generation are not only environmental (drastically abating the negative environmental impact of conventional electricity production, such as polluting gas emissions, freshwater ecotoxicity, eutrophication and particulate‐matter exposure), but also economic with a substantial fall in the price of electricity in the Italian wholesale electricity market (IPEX) . This replicates in Italy what is being observed in Germany, where a huge 40 GW installed solar park (twice the PV solar capacity in Italy) often leads to negative electricity prices, which compensates for the large renewable energy surcharge (€ 0.0688 per kWh in 2017)…”

New Energy and Weather Services in the Context of the Energy Transition

“…Besides benefiting the environment, [23] Italy'sl arge PV park (19.3 GW by the end of 2016) generates over 22 TWh of electricity concentrated in the central hours of the day of sunny months perfectly correlating with customer demand; this has significantlyr educed the price of electricity in the Italianw holesale electricity market (IPEX). [24] Furthermore, the decentralized nature of PV energy fed into the distribution grid in proximity to its users reduces operating costs related to the transmission grid while offering local voltage regulation, namely av alued grid service that improves grid stability and quality. [25] To ease the management of the rapidlyi ncreasing renewable energy flows,Italy'st ransmission system operator( Te rna) requires from Italy'se nergy services operator (GSE), which withdraws and sells on the marketa ll the electricity from renewable energy source (RES) plants earningp ublic incentives,a ne stimate of RES-sourced electricity fed to the grid on the day ahead.…”

The impact of electric vehicles on the power market

“…The corresponding average wholesale national power price in the IPEX (PUN) is displayed in the same chart. Data official sources are the same used in the recent analysis describing the IPEX market and the impact of PV power generation .…”