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The transition to a carbon-neutral electricity or even energy system will only succeed if large-scale implementation of renewable energy generators has a viable business case. [1,2] However, that will only happen if the electricity market can accommodate these distributed assets, in combination with the emergence of other developments like demand flexibility, distributed storage, and the increase in electric mobility. [3] A study by Hu showed that the Swedish intraday market functions properly with the inclusion of a large share of wind energy in the electricity system. [4] Solar farms have been, and in the Netherlands still are, supported by governmental schemes, by providing financial incentives or easy access to the electricity grid. However, renewable energy, at near-zero marginal cost and large capacity, will put downward pressure on the electricity market price. The case in point is the so-called "Californian Duck": due to the year-on-year increase in electricity generation of solar PV during the daylight hours, the dayahead market prices decrease. [5] A study by Chudinzow et al. shows that in some scenarios the price per MWh of solar electricity in the market will decrease even faster with increased deployment. [6] In contrast, Chesser and co-workers describe how increased electricity generation and local storage by consumers leads to increased consumer prices, as the fixed costs for the centralized generation and transport have to be recovered by a smaller market volume. The higher consumer prices will lead to more consumers to generate a larger fraction of their electricity consumption themselves, yielding a positive feedback loop in favor of more, distributed generation for self-consumption. [7] Haines and McConnell discuss the effect of large penetration of rooftop PV systems, in their case for the Australian electricity market. [8] They discuss the socioeconomic aspects of photovoltaic (PV) penetration and its effect on the market and conclude that, whatever your viewpoint on renewable energy is, it has a disruptive effect on the electricity market. In a similar analysis, for New Jersey, USA, Johnson et al. argue that despite the shift in the system peak hours to the early evening and small increases for consumers without PV installation, the fear for a "utility death spiral" may be exaggerated. [9] However, policymakers and the utility sector need to take these changes in peak hours and distribution into account when deciding how to distribute the costs for grid stability and grid interconnection over the different users, both PV adopters and nonparticipants. Therefore, it is essential that the growth of renewable energy goes hand in hand with the development of a stabilizing energy system.We therefore applied a scenario, based on the Dutch Climate Agreement, [10] of both fuel-based and renewable electricity generation assets in the Netherlands in combination with the expected increase in electricity demand for households, mobility and industry, and the integration of flexibility options like
The transition to a carbon-neutral electricity or even energy system will only succeed if large-scale implementation of renewable energy generators has a viable business case. [1,2] However, that will only happen if the electricity market can accommodate these distributed assets, in combination with the emergence of other developments like demand flexibility, distributed storage, and the increase in electric mobility. [3] A study by Hu showed that the Swedish intraday market functions properly with the inclusion of a large share of wind energy in the electricity system. [4] Solar farms have been, and in the Netherlands still are, supported by governmental schemes, by providing financial incentives or easy access to the electricity grid. However, renewable energy, at near-zero marginal cost and large capacity, will put downward pressure on the electricity market price. The case in point is the so-called "Californian Duck": due to the year-on-year increase in electricity generation of solar PV during the daylight hours, the dayahead market prices decrease. [5] A study by Chudinzow et al. shows that in some scenarios the price per MWh of solar electricity in the market will decrease even faster with increased deployment. [6] In contrast, Chesser and co-workers describe how increased electricity generation and local storage by consumers leads to increased consumer prices, as the fixed costs for the centralized generation and transport have to be recovered by a smaller market volume. The higher consumer prices will lead to more consumers to generate a larger fraction of their electricity consumption themselves, yielding a positive feedback loop in favor of more, distributed generation for self-consumption. [7] Haines and McConnell discuss the effect of large penetration of rooftop PV systems, in their case for the Australian electricity market. [8] They discuss the socioeconomic aspects of photovoltaic (PV) penetration and its effect on the market and conclude that, whatever your viewpoint on renewable energy is, it has a disruptive effect on the electricity market. In a similar analysis, for New Jersey, USA, Johnson et al. argue that despite the shift in the system peak hours to the early evening and small increases for consumers without PV installation, the fear for a "utility death spiral" may be exaggerated. [9] However, policymakers and the utility sector need to take these changes in peak hours and distribution into account when deciding how to distribute the costs for grid stability and grid interconnection over the different users, both PV adopters and nonparticipants. Therefore, it is essential that the growth of renewable energy goes hand in hand with the development of a stabilizing energy system.We therefore applied a scenario, based on the Dutch Climate Agreement, [10] of both fuel-based and renewable electricity generation assets in the Netherlands in combination with the expected increase in electricity demand for households, mobility and industry, and the integration of flexibility options like
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