IDEAS home Printed from https://ideas.repec.org/p/bei/00bewp/0004.html
   My bibliography  Save this paper

How to deal with negative power price spikes?—Flexible voluntary curtailment agreements for large-scale integration of wind

Author

Listed:
  • Christine Brandstätt
  • Gert Brunekreeft
  • Katy Jahnke

Abstract

For the large-scale integration of electricity from renewable energy sources (RES-E), the German system seems to reach its limits. In 2009, the electricity wholesale market experienced serious negative prices at times of high wind and low demand. The feed-in system in Germany consists of a fixed feed-in price, a take-off obligation and a RES priority rule, and in practice only very restrictive use of RES-E curtailment. Exactly the latter is the problem. We argue that the overall performance of the system would improve seriously by lifting the restrictions on the use of voluntary curtailment agreements, while retaining the priority rule as such. Since generators of RES-E can only improve under this system reform, investment conditions improve, leading to higher installed RES-E capacity. This in turn implies that reduced wind output due to curtailment can actually be offset by higher wind output in all periods in which there is no problem.

Suggested Citation

  • Christine Brandstätt & Gert Brunekreeft & Katy Jahnke, 2010. "How to deal with negative power price spikes?—Flexible voluntary curtailment agreements for large-scale integration of wind," Bremen Energy Working Papers 0004, Bremen Energy Research.
    • Handle: RePEc:bei:00bewp:0004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421511002795
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hiroux, C. & Saguan, M., 2010. "Large-scale wind power in European electricity markets: Time for revisiting support schemes and market designs?," Energy Policy, Elsevier, vol. 38(7), pages 3135-3145, July.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shahmohammadi, Ali & Sioshansi, Ramteen & Conejo, Antonio J. & Afsharnia, Saeed, 2018. "Market equilibria and interactions between strategic generation, wind, and storage," Applied Energy, Elsevier, vol. 220(C), pages 876-892.
    2. Rubin, Ofir D. & Babcock, Bruce A., 2013. "The impact of expansion of wind power capacity and pricing methods on the efficiency of deregulated electricity markets," Energy, Elsevier, vol. 59(C), pages 676-688.
    3. Vijayanarasimha Hindupur Pakka & Richard Mark Rylatt, 2016. "Design and Analysis of Electrical Distribution Networks and Balancing Markets in the UK: A New Framework with Applications," Energies, MDPI, vol. 9(2), pages 1-20, February.
    4. Banaei, Mohsen & Oloomi-Buygi, Majid & Zabetian-Hosseini, Seyed-Mahdi, 2018. "Strategic gaming of wind power producers joined with thermal units in electricity markets," Renewable Energy, Elsevier, vol. 115(C), pages 1067-1074.
    5. Leonardo Meeus, 2015. "Offshore grids for renewables: do we need a particular regulatory framework?," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    6. Kaldellis, J.K., 2011. "Critical evaluation of financial supporting schemes for wind-based projects: Case study Greece," Energy Policy, Elsevier, vol. 39(5), pages 2490-2500, May.
    7. Ketterer, Janina C., 2014. "The impact of wind power generation on the electricity price in Germany," Energy Economics, Elsevier, vol. 44(C), pages 270-280.
    8. Voumvoulakis, Emmanouil & Asimakopoulou, Georgia & Danchev, Svetoslav & Maniatis, George & Tsakanikas, Aggelos, 2012. "Large scale integration of intermittent renewable energy sources in the Greek power sector," Energy Policy, Elsevier, vol. 50(C), pages 161-173.
    9. John Dorrell & Keunjae Lee, 2020. "The Cost of Wind: Negative Economic Effects of Global Wind Energy Development," Energies, MDPI, vol. 13(14), pages 1-25, July.
    10. Brown, T. & Reichenberg, L., 2021. "Decreasing market value of variable renewables can be avoided by policy action," Energy Economics, Elsevier, vol. 100(C).
    11. Rious, Vincent & Perez, Yannick, 2014. "Review of supporting scheme for island powersystem storage," Renewable and Sustainable Energy Reviews, Elsevier, vol. 29(C), pages 754-765.
    12. Wu, Zhaoyuan & Zhou, Ming & Li, Gengyin & Zhao, Tong & Zhang, Yan & Liu, Xiaojuan, 2020. "Interaction between balancing market design and market behaviour of wind power producers in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 132(C).
    13. Narbel, Patrick A., 2014. "Rethinking how to support intermittent renewables," Discussion Papers 2014/17, Norwegian School of Economics, Department of Business and Management Science.
    14. Henriot, Arthur & Glachant, Jean-Michel, 2013. "Melting-pots and salad bowls: The current debate on electricity market design for integration of intermittent RES," Utilities Policy, Elsevier, vol. 27(C), pages 57-64.
    15. Brijs, Tom & De Jonghe, Cedric & Hobbs, Benjamin F. & Belmans, Ronnie, 2017. "Interactions between the design of short-term electricity markets in the CWE region and power system flexibility," Applied Energy, Elsevier, vol. 195(C), pages 36-51.
    16. Coninx, Kristof & Deconinck, Geert & Holvoet, Tom, 2018. "Who gets my flex? An evolutionary game theory analysis of flexibility market dynamics," Applied Energy, Elsevier, vol. 218(C), pages 104-113.
    17. González, Javier Serrano & Lacal-Arántegui, Roberto, 2016. "A review of regulatory framework for wind energy in European Union countries: Current state and expected developments," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 588-602.
    18. Hu, Jing & Harmsen, Robert & Crijns-Graus, Wina & Worrell, Ernst & van den Broek, Machteld, 2018. "Identifying barriers to large-scale integration of variable renewable electricity into the electricity market: A literature review of market design," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 2181-2195.
    19. Lynch & John Curtis, 2016. "The effects of wind generation capacity on electricity prices and generation costs: a Monte Carlo analysis," Applied Economics, Taylor & Francis Journals, vol. 48(2), pages 133-151, January.
    20. Jean-Michel Glachant & Arthur Henriot, 2013. "Melting-pots and salad bowls: the current debate on electricity market design for RES integration," Working Papers EPRG 1329, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.

    More about this item

    Keywords

    renewable energies; market design; feed-in system;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bei:00bewp:0004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anna Pechan (email available below). General contact details of provider: http://bremen-energy-research.de/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.