Designing electricity markets for high penetrations of zero or low marginal cost intermittent energy sources

Gordon W. Leslie; David I. Stern; Akshay Shanker; Michael T. Hogan

doi:10.1016/j.tej.2020.106847

Designing electricity markets for high penetrations of zero or low marginal cost intermittent energy sources

Gordon W. Leslie, David I. Stern, Akshay Shanker, Michael T. Hogan

Department of Economics

Research output: Contribution to journal › Article › Research › peer-review

24 Citations (Scopus)

Abstract

Integrating intermittent renewable generation with near zero private marginal costs for generating electricity will change market outcomes, but this article emphasizes that this integration does not change the fundamental economic principles behind market design. Market designs still need to adequately price scarcity and all network constraints and services. Such pricing is required to deliver investment incentives for the right technologies to locate at the right locations to efficiently maintain a stable and reliable electrical network.

Original language	English
Article number	106847
Number of pages	8
Journal	The Electricity Journal
Volume	33
Issue number	9
DOIs	https://doi.org/10.1016/j.tej.2020.106847
Publication status	Published - Nov 2020

Keywords

Electricity market design
Locational marginal pricing
Opportunity cost
Renewable energy transition
Storage
Wholesale electricity markets

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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10.1016/j.tej.2020.106847

Cite this

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abstract = "Integrating intermittent renewable generation with near zero private marginal costs for generating electricity will change market outcomes, but this article emphasizes that this integration does not change the fundamental economic principles behind market design. Market designs still need to adequately price scarcity and all network constraints and services. Such pricing is required to deliver investment incentives for the right technologies to locate at the right locations to efficiently maintain a stable and reliable electrical network.",

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KW - Locational marginal pricing

KW - Opportunity cost

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KW - Storage

KW - Wholesale electricity markets

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Designing electricity markets for high penetrations of zero or low marginal cost intermittent energy sources

Abstract

Keywords

UN SDGs

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