Long-term Equilibrium in Markets with Only Renewables and Energy Storage
Challenge and objective
As more wind and solar enters the power systems, uncertainties arise about market prices and cost recovery of assets.
This work analyses pricing in systems with only variable renewable energy (VRE) and energy storage (ES) and investigates if present power markets give proper signals for operation and investments.
Work performed
Theoretical derivation of equilibrium conditions for systems with only VRE and ES.
Obtaining price levels for all hours in the year, that provides balance between costs and revenues for the actors.
Significant results
System optimum and market optimum are identical only if price levels are linked to investment cost part of the year.
Indications that energy-only markets are not sufficient for economic efficiency in the extreme case of pure VRE-ES systems (no demand-side flexibility or thermal generation).
Impact for distribution system innovation
Important to understand the underlaying price dynamics in systems with e.g. PV and batteries.
Can have impact on the efficiency of local markets.
