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Effects of regulating the European Internal Market on the integration of variable renewable energy

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  • Hugo Algarvio
  • Fernando Lopes
  • António Couto
  • João Santana
  • Ana Estanqueiro

Abstract

The new proposal for regulating the European Internal Market for Electricity (EIME) can motivate the harmonization of the various National markets. The process of harmonizing the day‐ahead markets (DAMs) is at an advanced stage, with an efficiency in the use of interconnectors of 86%. However, the harmonization of both intraday (IDMs) and balancing markets (BMs) is still in its infancy, with an efficiency in the use of interconnectors of 50 and 19%, respectively. The new proposal brings new targets to DAMs, and European countries should make efforts to comply with them. The same is true for IDMs and BMs, but involving more ambitious targets, requiring higher efforts to be accomplished. Both the analysis of the various National markets (according to their compliance with the new proposal for regulating the EIME) and the advantages of the new proposal for key market participants (particularly, consumers, variable renewable generation, and conventional generation) are presented. The analysis indicates that the proposal contributes to a potential increase of the general welfare of market participants. However, some aspects of the proposal can negatively affect the revenue obtained from the National markets, notably for variable renewable generation and conventional generation. This article is categorized under: Wind Power > Systems and Infrastructure Energy Policy and Planning > Economics and Policy Energy Systems Analysis > Economics and Policy Energy and Development > Economics and Policy

Suggested Citation

  • Hugo Algarvio & Fernando Lopes & António Couto & João Santana & Ana Estanqueiro, 2019. "Effects of regulating the European Internal Market on the integration of variable renewable energy," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(6), November.
    • Handle: RePEc:bla:wireae:v:8:y:2019:i:6:n:e346
    DOI: 10.1002/wene.346
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    4. Hugo Algarvio & Fernando Lopes & António Couto & Ana Estanqueiro, 2019. "Participation of wind power producers in day‐ahead and balancing markets: An overview and a simulation‐based study," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(5), September.
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    Cited by:

    1. Hugo Algarvio & Fernando Lopes, 2023. "Bilateral Contracting and Price-Based Demand Response in Multi-Agent Electricity Markets: A Study on Time-of-Use Tariffs," Energies, MDPI, vol. 16(2), pages 1-17, January.
    2. Hugo Algarvio & António Couto & Ana Estanqueiro, 2024. "RES.Trade: An Open-Access Simulator to Assess the Impact of Different Designs on Balancing Electricity Markets," Energies, MDPI, vol. 17(24), pages 1-18, December.
    3. Peter D. Lund & John Byrne, 2020. "Little time left to reverse emissions—Growing hope despite disappointing CO2 trend," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 9(1), January.
    4. Hugo Algarvio & Fernando Lopes & António Couto & Ana Estanqueiro & João Santana, 2019. "Variable Renewable Energy and Market Design: New Products and a Real-World Study," Energies, MDPI, vol. 12(23), pages 1-17, November.
    5. Yang, Muyi & Sharma, Deepak & Shi, Xunpeng & Mamaril, Kristy & Jiang, Han & Candlin, Alison, 2022. "Power connectivity in the Greater Mekong Subregion (GMS) – The need for a wider discourse," Energy Policy, Elsevier, vol. 165(C).
    6. Niculescu Elena & Tantau Adrian, 2024. "Identification and Analysis of Main Drivers and Barriers to the Promotion of PPAs for Green Energy," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 18(1), pages 1182-1196.
    7. Hugo Algarvio, 2023. "The Economic Sustainability of Variable Renewable Energy Considering the Negotiation of Different Support Schemes," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    8. Hugo Algarvio & António Couto & Fernando Lopes & Ana Estanqueiro, 2019. "Changing the Day-Ahead Gate Closure to Wind Power Integration: A Simulation-Based Study," Energies, MDPI, vol. 12(14), pages 1-20, July.

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