Reflections on coordination mechanisms for accommodating increasing amounts of wind and solar in the power market

European power markets are being confronted with an unprecedented transition process toward a low-carbon power system. The speed and complexity of this shift are raising serious challenges and operational difficulties. This transition demands a more fundamental rethinking of the roles of the government and the market.

Governments have to be aware of being part of a process in which they stimulate and facilitate clean energy, in general, and variable renewable electricity (VRE), in particular. They have to organise their policies in such a way that ambitions, targets and guidelines for implementation are robustly defined as part of a long-term orientation and utilise market mechanisms where feasible.

  • Increasing systems costs are expected to consist largely of network costs, because of a large share of VRE. Additional market elements could be introduced, such as transmission pricing with stronger locational signals.
  • Investments in low-carbon generation can be incentivised in various ways. No single policy instrument could be a ‘silver bullet’. 
  • Adequacy of the system is more complicated and could become costly if options to improve flexibility, such as in demand response, are neglected.

Authors

PBL Authors
Pieter Boot Nico Hoogervorst
Other authors
Jacques de Jong

Specifications

Publication title
Reflections on coordination mechanisms for accommodating increasing amounts of wind and solar in the power market
Publication date
8 October 2014
Publication type
Report
Publication language
English
Product number
1588