Retail Tariff Design in Electricity Markets with Variable Renewable Production

Andreas Knaut

We develop a model for the calculation of capacity values in electricity systems with multiple regions and technologies. The model is formulated as a mixed integer program and enables the quantification of capacity values for generation technologies and transmission capacities in a consistent framework. In an illustrative case study, we test our model with empirical data from Germany and France. The results show that regional cooperation is able to significantly reduce the need for firm capacity.

Figure: Comparison of average hourly electricity demand with RTP and TIP for an average elasticity of -0.088.