Does renewable energy generation decrease the volatility of electricity prices? An analysis of Denmark and Germany

Although variable renewable energy (VRE) technologies with zero marginal costs decrease electricity prices, the literature is inconclusive about how the resulting shift in the supply curves impacts price volatility. Because the flexibility to respond to high peak and low off-peak prices is crucial for demand-response applications and may compensate for the losses of conventional generators caused by lower average prices, there is a need to understand how the penetration of VRE affects volatility. In this paper, we build distributed lag models with Danish and German data to estimate the impact of VRE generation on electricity price volatility. We find that in Denmark wind power decreases the daily volatility of prices by flattening the hourly price profile, but in Germany it increases the volatility because it has a stronger impact on off-peak prices. Our analysis suggests that access to flexible generation capacity and wind power generation patterns contribute to these differing impacts. Meanwhile, solar power decreases price volatility in Germany. By contrast, the weekly volatility of prices increases in both areas due to the intermittency of VRE. Thus, policy measures for facilitating the integration of VRE should be tailored to such region-specific patterns.     

Are electricity prices affected by the US dollar to Euro exchange rate? The Spanish case

The objective of this paper is to investigate the relationships between Spanish electricity spot prices and the US dollar/Euro (USD/Euro) exchange rate during the period 2005–2007, taking into account the study of the association between dollar and oil prices, in order to better understand the evolution of the former over time. The first finding in this study is that Spanish electricity spots prices, the USD/Euro exchange rate and oil prices are cointegrated; therefore there is a long-run equilibrium relationship between the three variables. Short-run relationships have been detected between oil prices and Spanish electricity prices and USD/Euro exchange rate in the sense that Spanish electricity prices and USD/Euro exchange rate are affected by oil prices in the short run. There is a transmission of volatility between USD/Euro exchange rate and oil prices to Spanish electricity prices; so although Spanish electricity prices are not affected in level by the movements of USD/Euro exchange rate, they are in volatility. In this kind of scenario the conclusions confirm that for countries so dependent on external causes as Spain, one possible solution for guarantying the energy security would be the promotion of the renewable energies. Therefore we cannot ignore the impact in the internal expenses of the cost of installation and generation of green energies so there must be a balance between the increase in renewables and the reasonable market price of the electricity.     

The impact of intermittently renewable energy on Italian wholesale electricity prices: Additional benefits or additional costs?

Most studies of the literature find that the development of renewable energy sources determines a decrease in the wholesale prices. Some authors use this finding to state that the current subsidies for renewable technologies cannot be considered as excessive. By carrying out a hybrid analysis (both simulation and ex-post empirical analyses) of the case of photovoltaic energy in Italy, this article demonstrates that this result cannot be generalised. Under market power, an increase in PV production can provide benefits in terms of a wholesale price decrease only beyond a specific threshold and especially if combined with other effects. Otherwise, it is likely that PV development could imply an increase in prices. Therefore, on the one hand, caution is necessary when using the estimated change in wholesale prices to evaluate the net cost for consumers of the supporting policies for renewables: either the simulation-based models or the full empirical analyses may be misleading. On the other hand, if "decarbonisation" is the main objective, the energy policies should be designed in order to assure a deep and balanced penetration of the clean technologies, regardless of their estimated transitory impact on wholesale prices (and in the meantime reviewing the organisation of power markets).     

Restructuring of Turkey’s electricity market and the share of hydropower energy: The case of the Eastern Black Sea Basin

This paper presents the historical development of Turkey’s electricity power sector, the efforts for introducing competition in the power industry in Turkey, and the concerns regarding restructuring in Turkey. The contribution of the hydropower energy potential in Turkey to the reconstruction of the electricity structure in Turkey is also investigated. Then, among the 25 hydrological basins in Turkey, the Eastern Black Sea Basin located in the northeast of Turkey, which has great advantages from the view point of small hydropower potential or hydropower potential without storage, is chosen as the case study to carry out some investigations concerning its potential and to analyze the contribution of the private sector (the corporate body) in regard to the development of hydro potential in this basin within the scope of the 4628 Electricity Market Law. With this law, concerning the restructuring of the electricity market, private sector investments in this segment have increased. In total, 1524 hydroelectric power projects with 22 360 MW installed capacity has been implemented until January 22nd, 2009 and this figure is continuously rising.     

The future developments of the electricity prices in view of the implementation of the Paris Agreements: Will the current trends prevail,or a reversal is ahead?

We assess the impact on the European electricity market of the European Union “Clean energy for all Europeans” package, which implements the EU Nationally Determined Contribution in Paris COP 21. We focus on the year 2030, which is the year with defined climate targets. For the assessment, we employ a game-theoretic framework of the wholesale electricity market, with high technical detail. The model is applied to two core scenarios, a Base scenario and a Low Carbon scenario to provide insights regarding the future electricity capacity, generation mix, cross-border trade and electricity prices. We also assess three additional variants of the core scenarios concerning different levels of: a) fossil and CO₂ prices; b) additional flexibility provided by batteries; c) market integration. We find that the electricity prices in 2030 substantially increase from today's level, driven by the increase in fuel and CO₂ prices. The flexibility from batteries helps in mitigating the price peaks and the price volatility. The increased low marginal cost electricity generation, the expansion of non-dispatchable and distributed capacities, and the higher market integration further reduce the market power from producers in the electricity markets from today's level.     

Management of variable electricity loads in wind – Hydrogen systems: The case of a Spanish wind farm

The main obstacles of most renewable energies are their variability and availability; thus, we propose the ‘hydrogen option’ as a means of energy management, and we study its feasibility in a specific wind farm. The installation will be capable to store electrochemically the surplus energy and return the electricity to the grid during the peak hours. The solution was to connect the system, so that we store the energy as hydrogen when the wind generation exceeds a threshold; this is done by an electrolyzer set, with the appropriate nominal power, where, besides the electrical conversion devices, we have designed a control programme for tuning the voltage and current densities to the optimal operation of the cells. To utilize the hydrogen downstream the storage subsystem, we have selected a fuel-cell and the output is finally converted to the grid requirements.     

Wind power and photovoltaic power: How to improve the accommodation capability of renewable electricity generation in China?

China's wind curtailment and photovoltaic curtailment was one of the prominent issues in 2014, and the renewable curtailment worsened in 2015. With the rapid growth of renewables, the phenomenon of the insufficiency in renewable accommodation capability is becoming more and more serious in 2016. In that case, the problem of the insufficient accommodation capability is pointed out by analyzing China's development requirements. The renewable power generation scale, the renewable power consumption, and the restrictions on the renewable electricity generation are discussed from the China's market perspective. Meanwhile, the legal environment, the planning requirement, the institutional setting, and the policy tools are introduced from the perspective of governmental regulation. An empirical analysis, a cause analysis and a trend analysis are illustrated before explaining the problem of renewable curtailment and proposing a solution for enhancing the accommodation capability. According to the analysis results, the solution for addressing the wind curtailment and PV curtailment is offered with respect to the technology, the institution, the legislation, and the political aspect. Through the research, the research conclusions are drew finally and the corresponding policy recommendations are put forward.     

The effect of using sun tracking systems on the voltage–current characteristics and power generation of flat plate photovoltaics

An experimental study was performed to investigate the effect of using different types of sun tracking systems on the voltage–current characteristics and electrical power generation at the output of flat plate photovoltaics (FPPV). Four electromechanical sun tracking systems, two axes, one axis vertical, one axis east–west and one axis north–south, were designed and constructed for the purpose of investigating the effect of tracking on the electrical values, current, voltage and power, according to the different loads (variable resistance). The above mentioned variables were measured at the output of the FPPV and compared with those on a fixed surface. The results indicated that the volt–ampere characteristics on the tracking surfaces were significantly greater than that on a fixed surface. There were increases of electrical power gain up to 43.87%, 37.53%, 34.43% and 15.69% for the two axes, east–west, vertical and north–south tracking, respectively, as compared with the fixed surface inclined 32° to the south in Amman, Jordan.     

Scenarios for the evolution of the Spanish electricity sector: Is it on the right path towards sustainability?

The Spanish energy and electricity models are clearly unsustainable: the large increase in electricity demand, a huge dependency on energy imports, and significant environmental impacts are clear reasons for concern. In this paper we take a look at the possible evolution of the Spanish electricity sector under different policy scenarios, and try to identify which are the policies that may help to achieve the desired goal, as well as the role that the different technologies may play. Results are quite optimistic in that, under the appropriate policy measures, carbon emissions of the electricity sector may be reduced in 2020 up to 37% compared to 1990, and energy imports may be also much reduced, at reasonable costs. However, this may only be achieved by strongly pursuing energy efficiency improvements and other energy conservation measures, which should then become a must for all energy plans in Spain, together with renewable energy promotion and stronger carbon reduction policies.     

Is disaggregation the holy grail of energy efficiency? The case of electricity

This paper aims to address two timely energy problems. First, significant low-cost energy reductions can be made in the residential and commercial sectors, but these savings have not been achievable to date. Second, billions of dollars are being spent to install smart meters, yet the energy saving and financial benefits of this infrastructure – without careful consideration of the human element – will not reach its full potential. We believe that we can address these problems by strategically marrying them, using disaggregation. Disaggregation refers to a set of statistical approaches for extracting end-use and/or appliance level data from an aggregate, or whole-building, energy signal. In this paper, we explain how appliance level data affords numerous benefits, and why using the algorithms in conjunction with smart meters is the most cost-effective and scalable solution for getting this data. We review disaggregation algorithms and their requirements, and evaluate the extent to which smart meters can meet those requirements. Research, technology, and policy recommendations are also outlined.     

Renewable electricity as a differentiated good? The case of the Republic of Korea

This paper examines the willingness for Korean consumers to pay a premium for renewable electricity under a differentiated good framework by applying the contingent valuation method. Korean consumers have been required to pay for their use of renewable electricity as of 2012. First, we find that Korean consumers recognise renewable electricity as a differentiated good from traditional electricity generated from fossil fuels or nuclear energy. The mean willingness to pay to use renewable electricity is USD 1.26 per month. Second, we confirm the existence of perfect substitution relationships among variant renewable technologies, which suggests that Korean consumers do not perceive them as differentiated goods. One reason for this perception is that Korean consumers are more inclined to favour economic feasibility over sustainability or the availability of the resource stock when choosing between renewable technology types. In sum, we can say that Korean consumers recognise renewable electricity as a differentiated good but that they do not differentiate between variant renewable technologies. Thus, the imposition of the cost of renewable electricity on consumers in the form of increased electricity charges would be acceptable to consumers as long as any price rise properly reflects their preferences.     

The effect of conducting bounding plates on the onset of Horton–Rogers–Lapwood convection

We present an analytical and numerical stability analysis of the onset of natural convection in a horizontal fluid-saturated porous cavity. The cavity is bounded by thin horizontal plates with uniform thickness whose outer surfaces are subject to a constant heat flux. The main aim is to determine the effect of the presence of the bounding plates on the onset of convection. The onset criterion is found to be sensitively dependent on the relative thickness of the plates and the porous layer, δ, and their relative conductivities, d. For the long wavelength mode it is precisely Ra_c = 12(1 + 2δd).     

Impact of the German nuclear phase-out on Europe's electricity generation—A comprehensive study

The combination of the ambitious German greenhouse gas reduction goals in the power sector and the nuclear phase-out raises many questions concerning the operational security of the German electricity generation system. This paper focusses on the technical feasibility (electricity generation and transmission) and CO₂-impact of the German nuclear phase-out on the short term (2012–2022).A detailed electricity generation simulation model is employed, including the German transmission grid and its international connections. A range of different conventional and renewable energy sources (RES) scenarios is considered. Results are presented for the change in generation mix, on the flows on the transmission network and on operational reliability issues.The scenario analysis shows that nuclear generation will be replaced mainly by coal- and lignite-based generation. This increases the CO₂-intensity of the German electricity sector. Furthermore, the results indicate that the German electricity export will decrease and under certain circumstances, the system becomes infeasible. Keeping some nuclear power plants online, would mitigate these effects. The amount of electricity generated from RES is shown to be the main driver for grid congestion.     

Public–private partnerships for wind power generation: The Portuguese case

Today’s portfolio of energy production, based mostly on fossil fuels, and increasing energy consumption go against a sustainable vision for the world’s development. Governments are shifting their energy policies towards renewable, nonpollutant sources of energy, developing large investment plans to ensure an adequate response to energy demand growth while keeping the environmental impact within reasonable boundaries. As in many other infrastructure-related sectors, new models for the provision of these facilities, and services, are being developed. Over the past 20 years, highways, hospitals, social housing, airports and dams have been developed in close collaboration with the private sector, not only in a contractor–supplier relation but also in deeper partnerships where the private sector assumes a substantial responsibility in managing and running the business. These models are known as public–private partnerships (PPPs). This research will look at the Portuguese experience in the application of PPP arrangements in the energy sector, particularly as far as the development of wind power plants is concerned. The evaluation procedures for selecting the private partner, the contract structure and the risk-sharing agreement are some of the issues deserving special attention.     

Australian retail electricity prices: Can we avoid repeating the rising trend of the past?

After a stable or declining real trend that persisted for more than half a century, Australian retail electricity prices have experienced a substantial increase, in real terms, since 2007. This has mainly been driven by increases in the cost of electricity distribution and to a lesser degree in the cost of electricity generation. Reducing greenhouse gas emissions, which is a bipartisan political goal in Australia, will likely deliver further increases in generation costs due to the expected higher cost of low emission technology. Participating in global negotiations on emission reduction targets and designing efficient policy mechanisms have been a major focus of governments over the last several decades. In contrast, managing distribution system costs has received less attention. While there were a number of factors which drove historical increases in distribution costs, management of peak demand growth could help contain or reduce the extent to which consumers, particularly households, experience further increases in distribution costs. The paper demonstrates how different combinations of carbon price and peak demand scenarios could impact future residential and industrial retail electricity prices to 2050 and discusses some behavioural and technological solutions to manage peak demand and potential barriers to their deployment.     

Quantifying the risk of an increase in the prices of non-energy products by combining the portfolio and input–output approaches

An increase in the price of imported fossil fuels indirectly increases the producer price in non-energy sectors; however, this indirect influence cannot be taken into account by the traditional portfolio approach. This study proposes an analytical framework combining the input–output (I–O) model and the portfolio approach that can take the indirect influence into account. A risk of an increase in the producer price in Japanese non-energy sectors during the period 1970–2000 is estimated, and the causes of a decrease in the risk through the analysis period are clarified by decomposing an index of the risk. The result indicates that almost all non-energy sectors have decreased this risk during the analysis period. The degree and cause of the decrease depends on a sector’s location in the hierarchical structure of Japanese industries. For example, assembly sectors have decreased their risk mainly as the result of improvement in energy usage by upstream sectors, such as material sectors, rather than their own improvements. Proper policies considering such a structure are required to decrease the risk further because the effort taken to do so is seldom motivated by economic profit.     

The effect of imidazolium ionic liquid on the morphology of Pt nanoparticles deposited on the surface of SrTiO3 and photoactivity of Pt–SrTiO3 composite in the H2 generation reaction

Photocatalytic water splitting has great potential in solar-hydrogen production as a low-cost and environmentally friendly method. Different unique techniques used to obtain photocatalysts with various modifications to improve H₂ generation have been introduced. In the present work, SrTiO₃ was successfully synthesized via the solvothermal method in the presence of ionic liquid (IL) - 1-butyl-3-methylimidazolium bromide ([BMIM][Br]) followed by surface decoration with Pt particles using the photodeposition method. The effect of the noble metal content and presence of IL on the morphology, optical and surface properties of SrTiO₃, thereby the effectiveness of hydrogen generation, has been thoroughly examined and presented. Unexpectedly, the presence of [BMIM][Br] at the SrTiO₃ surface affected the interaction between the semiconductor surface and platinum particles formed throughout photodeposition. Platinum particles at the surface of SrTiO₃_IL were found to be in the form of 2D clusters with a size of 1 nm. In comparison, Pt deposited on SrTiO₃ photocatalyst without application of IL created larger, three-dimensional structures with a diameter exceeding 5 nm. This is the reason why the total amount of platinum deposited on the SrTiO₃_IL sample is smaller than that on SrTiO₃ and justifies a higher efficiency of hydrogen generation of Pt modified SrTiO₃ photocatalyst in comparison to SrTiO₃ prepared in the presence of IL. The mechanism of H₂ generation in the water-splitting reaction in the presence of SrTiO₃_Pt photocatalyst was discussed.     

Red Eléctrica de España S.A.: Instrument of regulation and liberalization of the Spanish electricity market (1944–2004)

To understand the regulation system of the Spanish electricity market it is first necessary to understand on the one hand the system of tariffs and prices, and on the other the organization of the market for high voltage distribution. This article is concerned with this second aspect and traces its history from 1944, this is because before that date it was not possible to speak of a truly national market, but rather only of regional monopolies. In the 1940s, with Franco's new political regime, and the development of the Spanish electricity sector, it became necessary to completely rethink business strategies in relation to competition and cooperation, as well as the regulatory function of the state. In the 1950s, the main feature of the sector was the system of business self-regulation permitted by the state. Throughout the remaining years of Franco's government state intervention was particularly focussed on the subject of tariffs, but with the onset of democracy the state was to involve itself in the transmission network as well. A debate began as to whether it should be run by a private or public operator. In this dispute were ranged, on the one hand, the economic policy concepts of the major parties (PSOE and PP), and against them the strategic interests of the companies. Although the high voltage transmission network was nationalized by the state in the mid-1980s, establishing a ‘traditional’ model of regulation, the 1990s saw the triumph of a market-based regulation, strongly influenced by the dominant ideas in the European Union, which has converted Red Eléctrica into a private company. Currently the TSO (Transmission System Operators) model has been extended to Portugal and has entered into competition–cooperation with the other models of the European electricity market.     

Impacts of renewable energy regulations on the structure of power generation in China – A critical analysis

China is facing a number of energy-related challenges such as shortage of electricity supply and environmental pollution. The Government recognized the important role the renewable energy plays in the power generation structure. As a result, a series of supporting policies, laws and regulations have been issued to boost the renewable energies in China. This paper provides a critical analysis of the policy framework for the renewable energy in China and its impacts on the power generation structure. The relevant policy documents, including the most recent government work report delivered by Premier Wen Jia-bao during the Third Session of the 11th National People’s Congress (NPC) in March 2010 are analyzed. The patterns of renewable energy developments are found strongly correlated with the promulgation of relevant policies.     

Carbon pricing and electricity markets — The case of the Australian Clean Energy Bill

We examine the impact of the Clean Energy Bill on the price behavior of electricity futures contracts in the Australian National Electricity Market. First, we compute ex-ante forward risk premiums in the pre-tax period (until June 2012), then derive market-implied expectations about additional costs of the Carbon Pricing Mechanism (CPM) on generators as well as pass-through rates during the carbon tax (July 2012–June 2014) and post-tax (after July 2014) periods. Our results suggest that the observed carbon premiums became increasingly higher, once the carbon tax had been proposed and subsequently legislated in 2011. During periods where market participants could be relatively certain that the tax would be effective, we find expected carbon pass-through rates between 67% and 150%, which seem to be inversely related to emission intensities in the regional markets. Our results are also a clear indication of strong policy uncertainty with regards to the CPM and suggest that in the future a stable and long-term policy framework would be required for a carbon pricing mechanism to have its full effect.