• Energy Research

Artículos en revistas Pricing rules in wholesale electricity markets are usually classified around two major groups, namely linear (aka non-discriminatory) and non-linear (aka discriminatory). As well known, the major difference lies on the way non-convexities are considered in the computation of market prices. According to the classical marginal pricing theories, the resulting market prices are supposed to serve as the key signals around which capacity expansion revolves. Thus, the implementation of one or the other pricing rule can have a different effect on the investment incentives perceived by generation technologies, affecting the long-term efficiency of the whole market scheme. The objective of this paper is to assess to what extent long-term investment incentives can be affected by the pricing rule implemented. To do so, we propose a long-term capacity expansion model where investment decisions are taken based on the market remuneration. We use the model to determine the optimal mix in a real-size thermal system with high penetration of renewable energy sources (since its intermittency enhances the relevance of non-convexities), when alternatively considering the aforementioned pricing schemes. info:eu-repo/semantics/publishedVersion

Artículos en revistas The past two decades of growth in renewable energy sources of electricity (RES-E) have been largely driven by out-of-market support policies. These schemes were designed to drive deployment on the basis of specific subsidies sustained in time to allow for the larger costs as well as to limit investor risk. While these policies have proven to be effective, the way they have been designed to date has led to costly market distortions that are becoming more difficult to ignore as penetrations reach unpreceded levels. In the context of this growing concern, we provide a critical analysis of the design elements of RES-E support schemes, focusing on how they affect this trade-off between promoting and efficiently integrating RES-E. The emphasis is on the structure of the incentive payment, which in the end turns to be the cornerstone for an efficient integration. We conclude that, while needed, a well-designed and further developed capacity-based support mechanism complemented with ex-post compensations defined for reference benchmark plants, such as the mechanism currently implemented in Spain, is an alternative with good properties if the major goal is truly market integration. The approach is robust to future developments in technology cost, performance and market penetration of RES-E. info:eu-repo/semantics/publishedVersion

Artículos en revistas A major aim of Capacity Remuneration Mechanisms (CRMs) is to lead the power system expansion towards the level of security of supply that the regulator considers adequate. When introducing a capacity mechanism, therefore, regulators must ensure that the resulting mix will actually provide the firmness pursued, in such a way that both the generation and the demand resources awarded with the capacity remuneration actually perform as expected when the system needs them. In order to achieve this goal, some experts stressed the importance of including performance incentives in the CRM design. However, first capacity mechanisms (implemented mainly in the American continent) did not pay enough attention to this aspect. Two decades of operation have evidenced the need for performance incentives and these instruments are, at this writing, at the centre of the regulatory discussion. On the basis of a model analysis, this article demonstrates how the introduction of properly designed explicit penalty schemes for under-delivery can positively impact the CRM outcomes, providing resources with effective incentives to maximise their reliability, discriminating against non-firm generation units, and therefore increasing the effectiveness of the mechanism in achieving its objectives. info:eu-repo/semantics/publishedVersion

Artículos en revistas Variable energy resources (VER) penetration increases the cycling operation of conventional thermal plants, inducing an operating costs increase. In some cases, due to its impact on O&M costs, the cost of each start can significantly raise. The impact of this effect on spot prices depends on the pricing rules implemented: in some cases (non-linear pricing rules), these costs are compensated via discriminatory side payments and thus not included in the price formation while in others (aka linear) a single price per MWh is calculated to remunerate every single unit that is producing. These two alternative designs result lead for instance to a different remuneration for base-load plants. The first objective of this paper is to explore to what extent this remuneration difference might turn to be relevant as VER (and specifically solar PV) deployment develops. To do so, we also analyze the importance of properly allocating medium-term O&M costs in the short term, a hot topic in the regulation of a number of power markets today. We propose a way to properly calculate the start-up cost-adder component due to O&M and how this cost-adder is affected by cycling operation. info:eu-repo/semantics/publishedVersion