Renewable Electricity Policy and Market Integration

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract I analyze renewable electricity policy in a multinational electricity market with transmission investment. If national policy makers choose support schemes to maximize domestic welfare, then a trade policy motive arises operating independently of any direct benefit of renewable electricity. The model predicts electricity importing (exporting) countries to choose policies which reduce (increase) electricity prices. A narrow pursuit of domestic objectives distorts transmission investment, thereby market integration, below the efficient level. Distortions cannot be corrected by imposing national renewable targets alone. Instead, subsidies to transmission investment and a harmonization of and reduction in the number of policy instruments can improve welfare. Terms of use: Documents in EconStor may

Direct and indirect electrification of chemical industry using methanol production as a case study

“…The use of renewable energy sources (RES) plays a pivotal role in electrification and yet poses a significant challenge: the intermittency and variability of RES impact the stability of the grid and require improved planning and coordination to accommodate the fluctuations in availability. To this end, there are solutions underway, particularly in electricity market rules, design and operation [3]. Besides the technology aspects, policy formulation also poses additional difficulties.…”

Testing for Market Integration in the Australian National Electricity Market

“…Third, the empirical evidence on market integration can provide a significant additional input into the on-going policy debate concerning transmission investment strategies and network regulation arrangements across Australia. Furthermore, the impact of growing large scale trade of wholesale renewable power on the market integration outcomes of 'energy-only' markets has largely remained unexplored in the literature (Tangeras, 2015).We study market integration by obtaining a fuller understanding of the direct daily electricity spot pricing relationships (price convergence /divergence) between the interconnected regional electricity markets in the NEM. Price convergence (divergence) shows how strongly prices are related (unrelated) across similar markets and cointegration analyses can detect if the prices share a common long-run equilibrium (Johansen, 1995).…”

“…Third, the empirical evidence on market integration can provide a significant additional input into the on-going policy debate concerning transmission investment strategies and network regulation arrangements across Australia. Furthermore, the impact of growing large scale trade of wholesale renewable power on the market integration outcomes of 'energy-only' markets has largely remained unexplored in the literature (Tangeras, 2015).…”