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dc.contributor.authorHirth, Lionen_US
dc.date.accessioned2012-05-18en_US
dc.date.accessioned2012-07-13T14:52:49Z-
dc.date.available2012-07-13T14:52:49Z-
dc.date.issued2012en_US
dc.identifier.urihttp://hdl.handle.net/10419/59730-
dc.description.abstractThe income that wind and solar power receive on the market is affected by the variability of their output. At times of high availability of the primary energy source, they supply electricity at zero marginal costs, shift the supply curve (merit-order curve) to the right and thereby reduce the equilibrium price of electricity during that hour. The size of this merit-order effect depends on the amount of installed renewable capacity, the slope of the merit-order curve, and the intertemporal flexibility of the electricity system. Thus the price of wind power falls with higher penetration rates, even if the average electricity price remains constant. This work quantifies the effect of variability on the market value of renewables using a calibrated model of the European electricity market. The relative price of German wind power (value factor) is estimated to fall from 110% of the average electricity price to 50% as generation increases from zero to 30% of total consumption. For solar power, the drop is even sharper. Hence competitiveness for large-scale renewables deployment will be more difficult to accomplish than often believed.en_US
dc.language.isoengen_US
dc.publisherFondazione Eni Enrico Mattei Milanoen_US
dc.relation.ispartofseriesNota di lavoro, Fondazione Eni Enrico Mattei: Energy: Resources and Markets 15.2012en_US
dc.subject.jelQ42en_US
dc.subject.jelO13en_US
dc.subject.jelD24en_US
dc.subject.jelD61en_US
dc.subject.ddc330en_US
dc.subject.keywordWind Poweren_US
dc.subject.keywordSolar Poweren_US
dc.subject.keywordElectricity Marketen_US
dc.subject.keywordPower Generation Economicsen_US
dc.subject.keywordRenewablesen_US
dc.subject.keywordValue Factoren_US
dc.subject.keywordNumerical Modellingen_US
dc.titleThe market value of variable renewablesen_US
dc.typeWorking Paperen_US
dc.identifier.ppn715900749en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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