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Market design for a high-renewables European electricity system

August 2017 – This report was commissioned by CISL to provide a set of policy recommendations for the market design of a future EU electricity system characterised by a dominant share of intermittent renewable energy supply (RES), in line with the stated targets of European governments.

Market design for a high re

About the report

This report, commissioned by CISL, presents a set of policy recommendations for the market design of a future European electricity system characterized by a dominant share of intermittent renewable energy supply (RES), in line with the stated targets of European governments. Authored by David Newbery, Michael G. Pollitt, Robert A. Ritz, Wadim Strielkowski at the Energy Policy Research Group (EPRG), the paper discusses the market failures that need to be addressed to accommodate RES in liberalized electricity markets, reviews the evolution of the EU’s RES policy mechanisms, and summarizes the key market impacts of RES to date. It then sets out economic principles for market design and use these to develop our policy recommendations. The analysis covers the value of interconnection and market integration, electricity storage, the design of RES support mechanisms, distributed generation and network tariffs, the pricing of electricity and flexibility as well as long-term contracting and risk management.

Citing the report

University of Cambridge Institute for Sustainability Leadership (CISL) and Energy Policy Research Group. (May 2017). Market design for a high-renewables European electricity system. Cambridge, UK.

Published: August 2017

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