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Main Title: Renewable electricity and backup capacities: an (un-) resolvable problem?
Author(s): Praktiknjo, Aaron J.
Erdmann, Georg
Type: Article
Language Code: en
Abstract: Public support for renewables has led to an unexpected investment momentum in Germany. A consequence is reduced wholesale electricity prices, the so-called merit order effect of renewables.We estimate this reduction using an econometric approach and give a quantitative overview of the financial situation of conventional generators. Our results indicate that investments in new conventional capacities are economically unviable. With the current market design, this situation is going to impact supply security at least in the long run. A popular approach to address this issue is the introduction of additional public support for conventional power plants. However, we believe that subsidizing renewable and conventional capacities contradicts the idea of a liberal market. We present two alternatives: State control of investments in renewables through auctions (as proposed by the European Commission), and a premium paid to representatives of the demand side (such as retailers) dependence of their shares of renewables.
Issue Date: 2016
Date Available: 25-Jan-2018
DDC Class: 620 Ingenieurwissenschaften und zugeordnete Tätigkeiten
330 Wirtschaft
Subject(s): renewables
supply security
merit order
missing money
market design
erneuerbare Energien
Journal Title: The energy journal
Publisher: International Association for Energy Economics
Publisher Place: Cleveland, Ohio
Volume: 37
Issue: SI2
Publisher DOI: 10.5547/01956574.37.SI2.apra
Page Start: 89
Page End: 106
EISSN: 1944-9089
ISSN: 0195-6574
Appears in Collections:FG Energiesysteme » Publications

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