Market design in an intermittent renewable future: cost recovery with zero-marginal-cost resources

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Abstract

The basic features of an efficient short-term wholesale market design do not necessarily need to change to accommodate a significantly larger share of zero-marginal-cost, intermittent renewable energy from wind and solar resources. A large share of controllable zero-marginal-cost generation does not create any additional market design challenge relative to a market with a large share of controllable positive marginal cost generation. Regardless of the technology, generation unit owners must recover their fixed costs from sales of energy, ancillary services, and long-term resource adequacy products.

Original languageEnglish
Pages (from-to)29-40
Number of pages12
JournalIEEE Power and Energy Magazine
Volume19
Issue number1
DOIs
Publication statusPublished - Jan 2021
Externally publishedYes

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