The performance of wholesale markets has been undermined by the introduction of increasing levels of renewable generation capacity that receives priority in dispatch. Prices have become more volatile and less predictable due to renewable output changes that are not linked to demand levels. The renewable generation output may be increasing when the demand is falling making prediction of the demand and marginal prices very difficult. The result is to place a premium on flexibility in generation and demand.

Chapter Contents:

• 8.1 Introduction
• 8.2 Market challenges
• 8.3 Renewable support schemes
• 8.4 Small-scale subsidies
• 8.5 Market performance improvement
• 8.6 Single-buyer models
• 8.7 A model for 2030
• 8.8 Availability payments
• 8.9 Renewable generation impact
• 8.10 Impact of renewable generation on market prices
• 8.11 Regulatory initiatives
• 8.12 Dispatch process
• 8.13 Impact of CO2 charges
• 8.14 Conclusions

Inspec keywords: power markets; power generation dispatch; power generation economics; pricing

Other keywords: marginal prices; wholesale markets; demand price prediction; renewable generation capacity

Subjects: Generating stations and plants; Power system management, operation and economics