On the profit variability of power plants in a system with large-scale renewable energy sources

The increasing share of renewable energy sources and its “`merit-order effect´” have a substantial impact on the profitability of conventional power plants in the power system. This paper presents an analysis of the profitability of power plants under the large-scale integration of variable renewable energy sources, targeting the question for sufficient incentives to maintain resource adequacy in the power system. To that, a 2030 scenario of Northern Europe is applied, in which about 25% of the annual electricity production stems from variable renewable energy sources (such as wind and solar power production). The analysis is performed with the multi-area long-term operation optimisation model EMPS. To capture the climatic stochasticity of renewable energy sources (hydro, wind and solar) data for 75 climatic years are utilized with a resolution of six hours.