Integrating renewable energy sources into electricity markets: Power system operation, resource adequacy and market design

Journal title ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT
Author/s Umberto Monarca, Ernesto Cassetta, Alessandro Sarra, Cesare Pozzi
Publishing Year 2016 Issue 2015/2
Language English Pages 18 P. 149-166 File size 210 KB
DOI 10.3280/EFE2015-002010
DOI is like a bar code for intellectual property: to have more infomation click here

Below, you can see the article first page

If you want to buy this article in PDF format, you can do it, following the instructions to buy download credits

Article preview

FrancoAngeli is member of Publishers International Linking Association, Inc (PILA), a not-for-profit association which run the CrossRef service enabling links to and from online scholarly content.

Focusing on the Italian power system, the article examines how the national regulatory framework has been modified to effectively accommodate and further increase the share of renewable energy in the energy mix while preserving system reliability. This paper argues that operational changes and regulatory measures adopted so far, which are mainly directed to create a level playing field between different energy sources, constitute a short-term response, and thus of limited effectiveness while increasing cost for consumers. To intensify the de-carbonization process of the Italian power system a more fundamental revision of the current market design is required. In this view, an essential ingredient is the future expansion of the electricity grid starting from a clear recognition of energy mix that we intend to reach in the mid/long term.

Keywords: Renewable energy policy, reliability of supply, resource adequacy, regulation shortcoming, market integration, capacity payment

Jel codes: L52, L94, L98

  1. Albala-Bertrand J.M. (1993). Political economy of large natural disasters. Oxford: Clarendon Press.
  2. Benson C. and Clay E. (2004). Understanding the economic and financial impacts of natural disasters, Disaster Risk Management Series, n. 4.
  3. Barro R. (2009). Rare Disasters, Asset Prices, and Welfare Costs. American Economic Review, 99 (1): 243-264. DOI: 10.1257/aer.99.1.243
  4. Benitez D., Johnson D. and Reinstein T. (2010). Perú Downstream Natural Gas Sector: A Preliminary Assessment. ESMAP, World Bank.
  5. Borenstein E., Cavallo E. and Jeanne O. (2015). The Welfare Gains from Macro Insurance Against Natural Disasters. NBER Working Paper Series, WP21674. DOI: 10.3386/w21674
  6. Cavallo E., Galiani S., Noy I. and Pantano J. (2010). Catastrophic Natural Disasters and Economic Growth. IDB Working Papers Series, IDB-WP-183.
  7. Coffman M. and Noy I. (2009). Hurricane Iniki: Measuring the Long-Term Economic Impact of a Natural Disaster Using Synthetic Control. University of Hawaii Economics Working Paper 09-05.
  8. Chisari O., Romero C. and others (2010). Un modelo de equilibrio general computable para la Argentina 2006. Serie de Textos de Discusión n. 63, Instituto de Economía, FACE- UADE.
  9. Dammert A. and Molinelli F. (2006). ¿Qué significa el Proyecto Camisea? Documento de Trabajo n. 23, Oficina de Estudios Económicos, OSINERGMIN.
  10. Dammert A., García R. and Vásquez A. (2006). Los efectos económicos del proyecto Camisea en el Perú, 2005-2014. Documento de Trabajo n. 14, Oficina de Estudios Económicos, OSINERGMIN.
  11. Felbermayr G. and Gröschl J. (2014). Naturally Negative: The Growth Effects of Natural Disasters. Journal of Development Economics, 11 (4): 92-106. DOI: 10.1016/j.jdeveco.2014.07.004
  12. Greenberg M., Mantell N., Lahr M., Felder F. and Zimmerman R. (2007). Short and Intermediate Economic Impacts of a Terrorist-Initiated Loss of Electric Power: Case Study of New Jersey. Energy Policy, 35 (1): 722-733. DOI: 10.1016/j.enpol.2006.01.017
  13. Halliday T. (2006). Migration, Risk and Liquidity Constraints in El Salvador. Economic Development and Cultural Change, 54 (4): 893-925. DOI: 10.1086/503584
  14. Horwich G. (2000). Economic Lessons of the Kobe Earthquake. Economic Development and Cultural Change, 48 (3): 521-542. DOI: 10.1086/452609
  15. Horridge M., Madden J. and Wittwer G. (2005). The Impact of the 2002-2003 Drought on Australia. Journal of Policy Modeling, 3 (3): 285-308. DOI: 10.1016/j.jpolmod.2005.01.008
  16. Klomp J. and Valckx K. (2014). Natural Disasters and Economic Growth: A Meta-Analysis. Global Environmental Change, 26 (2): 183-195. DOI: 10.1016/j.gloenvcha.2014.02.006
  17. Lazzaroni S. and van Bergeijk P. (2014). Natural Disasters’ Impact, Factors of Resilience and Development: A Meta-Analysis of the Macroeconomic Literature. Ecological Economics, 107: 333-345. DOI: 10.1016/j.ecolecon.2014.08.015
  18. Noy I. and Bang Vu T. (2010). The Economics of Natural Disasters in a Developing Country: The Case of Vietnam. Journal of Asian Economics, 21 (4): 345-354. DOI: 10.1016/j.asieco.2010.03.002
  19. Okuyama Y. (2007). Economic Modeling for Disaster Impact Analysis: Past, Present, and Future. Economic Systems Research, 19 (2): 115-124. DOI: 10.1080/09535310701328435
  20. Okuyama Y. and Sahin S. (2009). Impact Estimation of Disasters: A Global Aggregate for 1960 to 2007. The World Bank, Policy Research Working Paper 4963. DOI: 10.1596/1813-9450-4963
  21. Okuyama Y. and Santos J. (2014). Disaster Impact and Input-Output Analysis. Economic Systems Research, 26 (1): 1-12. DOI: 10.1080/09535314.2013.871505
  22. Ranghieri F. (2014). Learning from Megadisasters: Lessons Learnt from the Great East Japan Earthquake and Tsunami. Economics and Policy of Energy and the Environment, 3: 5-17. DOI: 10.3280/efe2014-003001
  23. Robinson S., Cattaneo A. and El-Said M. (2001). Updating and Estimating a Social Accounting Matrix Using Cross Entropy Methods. Economic System Research, 13 (1): 47-64. DOI: 10.1080/09535310120026247
  24. Romero C., Chisari O., Greco E., Mastronardi L. and Vila Martínez J. (2013). Actualización del modelo de equilibrio general computado para Perú con énfasis en el sector energético. Informe Final, Contrato OSINERGMIN AMC N° 0034-2013.
  25. Rose A. and Guha G. (2004). Computable general equilibrium modeling of electric utility lifeline losses from earthquakes. In: Okuyama Y. and Chang S. (Eds.). Modeling Spatial and Economic Impacts of Disasters. New York: Springer.
  26. Rose A., Oladosu G. and S. Liao (2007). Business Interruption Impacts of a Terrorist Attack on the Electric Power System of Los Angeles: Customer Resilience to a Total Blackout. Risk Analysis, 27 (3): 513-531. DOI: 10.1111/j.1539-6924.2007.00912.x
  27. Rose A. and Wei D. (2013). Estimating the Economic Consequences of a Port Shutdown: The Special Role of Resilience. Economic Systems Research, 25 (2): 212-232. DOI: 10.1080/09535314.2012.731379
  28. Rutherford T. (2005). GTAP6inGAMS: the dataset and static model. Working paper prepared for the workshop: Applied general equilibrium modeling for trade policy analysis in Russia and the CIS. Available at http://www.mpsge.org/gtap6/gtap6gams.pdf.
  29. Selcuk F. and Yeldan E. (2001). On the Macroeconomic Impact of the August 1999 Earthquake in Turkey: A First Assessment. Applied Economics Letters, 8 (7): 483-488. DOI: 10.1080/13504850010007501
  30. Tamayo J., Salvador J., Vásquez A. and García R. (Eds.) (2014). La Industria del Gas Natural en el Perú: A diez años del Proyecto Camisea. Lima: OSINERGMIN.
  31. Vásquez A., Salvador J., García R. and Fernández V. (2013). Assessing Risks and Regulating Safety Standars in the Oil and Gas Industry: The Peruvian Experience. Documento de Trabajo n. 31, Oficina de Estudios Económicos, OSINERGMIN.
  32. Vásquez A. (2012). The Regulation of Oil Spills and Mineral Pollution: Policy lessons for the U.S.A. and Peru from the Deep Water Horizon blowout and other accidents. Berlin: Lambert Academic Publishing.
  33. Vásquez A. and Balistreri E. (2010). The Marginal Cost of Public Funds of Mineral and Energy Taxes in Peru. Resources Policy, 35 (4): 257-264. DOI: 10.1016/j.resourpol.2010.08.002
  34. Xie W., Li N., Wu J.-D. and Hao X.-L. (2013). Modeling Economic Costs of Disasters and Recovery Involving Positive Effects of Reconstruction: Analysis Using a Dynamic CGE Model. Natural Hazards and Earth System Sciences, 1: 6357-6398. DOI: 10.5194/nhessd-1-6357-2013
  35. Zhang P. and Peeta S. (2011). A Generalized Modeling Framework to Analyze Interdependencies Among Infrastructure Systems. Transportation Research Part B: Methodological, 45(3): 553-579. DOI: 10.1016/j.trb.2010.10.001

  • A three-step procedure to investigate the convergence of electricity and natural gas prices in the European Union Ernesto Cassetta, Consuelo R. Nava, Maria Grazia Zoia, in Energy Economics 105697/2022 pp.105697
    DOI: 10.1016/j.eneco.2021.105697
  • Determinants and barriers of PV self-consumption in Spain from the perception of the installers for the promotion of distributed energy systems José Ángel Gimeno, Eva Llera Sastresa, Sabina Scarpellini, in ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT 1/2020 pp.153
    DOI: 10.3280/EFE2020-001007
  • EU Electricity Market Integration and Cross-Country Convergence in Residential and Industrial End-User Prices Ernesto Cassetta, Consuelo Rubina Nava, Maria Grazia Zoia, in SSRN Electronic Journal /2021
    DOI: 10.2139/ssrn.3995825

Umberto Monarca, Ernesto Cassetta, Alessandro Sarra, Cesare Pozzi, Integrating renewable energy sources into electricity markets: Power system operation, resource adequacy and market design in "ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT" 2/2015, pp 149-166, DOI: 10.3280/EFE2015-002010