On managing the integration of large shares of renewables in electricity supply systems

In recent years increasing shares of intermittent renewable energy sources (RES) have changed the usual pattern of electricity markets especially in Western Europe. The fact that these must run capacities are offered at Zero costs over a large time per year have led to the argumentation that fossile plants like CCGT or coal power stations become economically less attractive because of the lower full load hours per year. This argument has led to the call for “capacity” markets in addition to the current “energy-only” markets. The core objective of this paper is to discuss the relevance and the effects of such a system and the alternatives. The major result of our analyses is that capacity markets are a step back to a planned economy with - all in all - much higher costs for society.