Consequences of the missing risk market problem for power system emissions
Challenge and objective
- Power system decarbonization could be hindered by incomplete long-term markets.
- Incomplete long-term markets may lead to sub-optimally little clean energy investment.
- Long-term market mechanisms for generation and storage could advance climate goals.
Work performed
- New approach to modeling risk-averse generation expansion with missing markets.
- Analysis of how the missing market problem impacts emissions, as well as how it impacts investments in variable renewables and storage.
Significant results
- We observe higher emissions and a shift in investment from renewables and storage toward fossil fuel plants when risk markets are missing.
- Absence of long-term markets may distort power system outcomes in a way that interferes with climate policy goals.
Impact for distribution system innovation
- Relevant for understanding how incomplete markets may be a barrier for PV, wind and grid batteries both in distribution grids and transmission grids.
- Name
- Magnus Korpås
- Title
- WP3 Lead
- Organization
Reference in CINELDI
