The common design of electricity markets is marginal in terms of fuel prices. This design is poorly adapted to the operating characteristics of sources such as wind and photovoltaic plants, which variable costs are close to zero, have very high capital costs and non-negligible investment risks. Those plants, whose generation depends (almost) directly on weather conditions and whose production can be forecasted but not ensured, do not offer the (classic) guarantee of power, on which the classical “stacking” of offers on the market for “the day-ahead” is normally based. For these reasons it is important to rethink the electricity markets design and the negotiation mechanisms for the near future – when VRE will be dominant and price makers – that reflect the real value of renewable generation for the society and the planet, and to develop new business models that create the necessary conditions for continuous investments and fair profits and costs.
LNEG is enrolled in activities related to the design and operation of system with high renewable penetration through the participation in IEA Task 25 – Design and Operation of Power System with high Amounts of Wind Power, in European Energy Research Alliance Joint on Programme Energy Systems Integration (EERA JP ESI), and European Sustainable Energy Innovation Alliance (ESEIA).