The impact of weather and of batteries on the investment risk for backup gas power plants in a largely renewable energy system

With an increasing wind and photovoltaic share, the German generation mix becomes more weather-dependent. Backup technologies can help to bridge scarcity moments. These rare moments with high prices are the main events for their cost recovery. However, the uncertain revenue flow combined with long payback periods leads to high investment...

The effectiveness of capacity markets in the presence of a high portfolio share of renewable energy sources

The effectiveness of a capacity market is analyzed by simulating three conditions that may cause suboptimal investment in the electricity generation: imperfect information and uncertainty; declining demand shocks resulting in load loss; and a growing share of renewable energy sources in the generation portfolio. Implementation of a capacity...

An analysis of a forward capacity market with long-term contracts

We analyze the effectiveness of a forward capacity market (FCM) with long-term contracts in an electricity market in the presence of a growing share of renewable energy. An agent-based model is used for this analysis. Capacity markets can compensate for the deteriorating incentive to invest in controllable power plants when the share of...