The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany

Sensfuß, Frank; Ragwitz, Mario; Genoese, Massimo

doi:10.1016/j.enpol.2008.03.035

Cited by 761 publications

(423 citation statements)

References 4 publications

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“…Forecasting the proportion of the average electricity market price that wind generation will extract in Ireland. It has been well established (Sensfuß et al, 2008), (Munksgaard and Morthorst, 2008) that as wind capacity increases in a system the average price the wind generation will extract from the market will decrease due to the depression of prices in the hours when there are large volumes of incrementally "free" wind energy. The magnitude of this effect will depend on the evolution of the Irish generation portfolio, the level of wind capacity and the market structure.…”

Section: Quantifying the Value And Cost Of The Refit Schemementioning

confidence: 99%

The efficiency of Ireland's Renewable Energy Feed-In Tariff (REFIT) for wind generation

Doherty

O’Malley

2011

Energy Policy

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Ireland's Renewable Energy Feed-In Tariff (REFIT) for wind generation has some unusual features making it different from other REFIT schemes around the world. By utilising an annual floor price element the scheme presents an option value to the contract holder, which to date has gone unnoticed or unvalued in the market. By employing an option pricing framework, this paper has quantified for the first time in the public domain the expected costs and value of the Irish REFIT support scheme for wind generation. While the cost of the REFIT scheme to the electricity consumer appears to be lower than the cost of schemes in other countries, significant inefficiencies exist as a result of the structure of the scheme. The Irish REFIT scheme is contrasted with a single Fixed Price support scheme and the analysis suggests that the Fixed Price scheme can provide a similar or greater incentive to the wind sector at half the cost to the end electricity consumer, and may also prove more compatible with consumers desire to reduce inter-year electricity portfolio cost volatility.

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Section: Quantifying the Value And Cost Of The Refit Schemementioning

confidence: 99%

The efficiency of Ireland's Renewable Energy Feed-In Tariff (REFIT) for wind generation

Doherty

O’Malley

2011

Energy Policy

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“…Hence, prices are low in hours with high renewable power supply or a low residual load. This merit-order effect [35], [36], [37] of RES-E in a uniform price auction is used to send a price-based control signal to the PEVs.…”

Section: Simulation Methodsmentioning

confidence: 99%

Integration of intermittent renewable power supply using grid-connected vehicles – A 2030 case study for California and Germany

2013

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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. Terms of use: Documents in Martin WietschelIntegration of intermittent renewable power supply using grid-connected vehicles -a 2030 case study for California and Germany AbstractThis paper describes a method to characterize the fluctuating electricity generation of renewable energy sources (RES) in a power system and compares the different parameters for California and Germany. Based on this method describing the fluctuation and residual load, the potential contribution of grid-connected vehicles to balancing generation from renewable energy sources is analyzed for a 2030 scenario using the agent-based simulation model PowerACE. The analysis reveals that integrating fluctuating RES is possible with less effort in California because of a higher correlation between RES generation and the load curve here. In addition, RES capacity factors are higher for California and therefore the ratio of installed capacity to peak load is lower. Germany, on the other hand, faces extreme residual load changes between periods with and without supply from RES. In both power system scenarios, grid-connected vehicles play an important role in reducing residual load fluctuation if smart charging is used. Uncontrolled charging or static time-of-use tariffs do not significantly improve the grid integration of RES.

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“…3 Preferential dispatching of renewable energy in the electricity market leads to a "merit-order effect", crowding out the most costly marginal power plants (Sensfuß et al, 2008;see fig. 2 A).…”

Section: Methodsmentioning

confidence: 99%

The impact of electricity demand reduction policies on the EU-ETS: Modelling electricity and carbon prices and the effect on industrial competitiveness

et al. 2013

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The European electricity market is linked to a carbon market with a fixed cap that limits greenhouse gas emissions. At the same time, a number of energy efficiency policy instruments in the EU aim at reducing the electricity consumption. This article explores the interactions between the EU's carbon market on the one hand and instruments specifically targeted towards energy end-use efficiency on the other hand. Our theoretical analysis shows how electricity demand reduction triggered by energy efficiency policy instruments affects the emission trading scheme: Without adjustments of the fixed cap, decreasing electricity demand reduces the carbon price without reducing total emissions. With lower carbon prices, costly low emission processes will be substituted by cheaper high emitting processes. Possible electricity and carbon price effects of electricity demand reduction scenarios under various carbon caps are quantified with a long-term electricity market simulation model. The results show that electricity efficiency policies allow for a significant reduction of the carbon cap: Compared to the 2005 emission level, 30% emission reductions can be achieved by 2020 within the emission trading scheme with similar or even lower costs for the industrial sector than were expected when the cap was initially set for a 21% emission reduction.

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The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany

Cited by 761 publications

References 4 publications

The efficiency of Ireland's Renewable Energy Feed-In Tariff (REFIT) for wind generation

The efficiency of Ireland's Renewable Energy Feed-In Tariff (REFIT) for wind generation

Integration of intermittent renewable power supply using grid-connected vehicles – A 2030 case study for California and Germany

The impact of electricity demand reduction policies on the EU-ETS: Modelling electricity and carbon prices and the effect on industrial competitiveness

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