Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/180966
Authors: 
Mier, Mathias
Year of Publication: 
2018
Series/Report no.: 
Oldenburg Discussion Papers in Economics V-412-18
Abstract: 
Most electricity systems face contractual fixed consumer prices in the short term, that is, load and price are fixed before the random supply of renewables like wind or solar realizes. Steam power plants also make production decisions before such a random supply realizes. These capacities cannot react instantly, which creates a demand for gas turbines to balance renewables. We approach these dynamics by considering different types of dispatchability in a more general framework of peak-load pricing and contribute to the debate on market design and capacity payments. Steam power always recovers costs, gas turbines never do so, and renewables might. We describe possible transfer schemes to overcome this problem and provide a more market-oriented solution. However, consumers must always be compensated for lost load.
Subjects: 
renewable energies
peak-load pricing
electricity market design
missing market
missing money
capacity payments
JEL: 
Q21
Q41
Q42
Q48
L94
L98
Document Type: 
Working Paper

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