An Electricity Market Model with Intermittent Power
A competitive electricity market model is used to analyze the effects of replacing conventional base load power with an intermittent power supply. The model is a conceptual one and uses linear demand curves with a triangular probability distribution. In a base reference case, there are two types of...
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MDPI AG
2025-03-01
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| Series: | Energies |
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| Online Access: | https://www.mdpi.com/1996-1073/18/6/1435 |
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| author | Rögnvaldur Hannesson |
| author_facet | Rögnvaldur Hannesson |
| author_sort | Rögnvaldur Hannesson |
| collection | DOAJ |
| description | A competitive electricity market model is used to analyze the effects of replacing conventional base load power with an intermittent power supply. The model is a conceptual one and uses linear demand curves with a triangular probability distribution. In a base reference case, there are two types of providers of electricity, base load providers and peak load providers, each with a constant marginal cost. Prices are determined by the highest marginal cost of the active providers or by what the market can bear. The production capacity of each type of provider is determined by rents being equal to fixed costs. This reference case is compared to a case where base load providers have been replaced by intermittent solar and wind energy, with peak load providers still active. Despite lower costs, intermittent power is likely to result in higher and more volatile prices of electricity. Lower electricity prices could result if conventional baseload power is sufficiently expensive. The implications of changes in the availability of intermittent power are also analyzed. |
| format | Article |
| id | doaj-art-1db4b5944ba04be394f9570bbb13cd0a |
| institution | Kabale University |
| issn | 1996-1073 |
| language | English |
| publishDate | 2025-03-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Energies |
| spelling | doaj-art-1db4b5944ba04be394f9570bbb13cd0a2025-08-20T03:43:30ZengMDPI AGEnergies1996-10732025-03-01186143510.3390/en18061435An Electricity Market Model with Intermittent PowerRögnvaldur Hannesson0Norwegian School of Economics, Helleveien 30, N-5045 Bergen, NorwayA competitive electricity market model is used to analyze the effects of replacing conventional base load power with an intermittent power supply. The model is a conceptual one and uses linear demand curves with a triangular probability distribution. In a base reference case, there are two types of providers of electricity, base load providers and peak load providers, each with a constant marginal cost. Prices are determined by the highest marginal cost of the active providers or by what the market can bear. The production capacity of each type of provider is determined by rents being equal to fixed costs. This reference case is compared to a case where base load providers have been replaced by intermittent solar and wind energy, with peak load providers still active. Despite lower costs, intermittent power is likely to result in higher and more volatile prices of electricity. Lower electricity prices could result if conventional baseload power is sufficiently expensive. The implications of changes in the availability of intermittent power are also analyzed.https://www.mdpi.com/1996-1073/18/6/1435electricitygreen energypower marketsintermittent power |
| spellingShingle | Rögnvaldur Hannesson An Electricity Market Model with Intermittent Power Energies electricity green energy power markets intermittent power |
| title | An Electricity Market Model with Intermittent Power |
| title_full | An Electricity Market Model with Intermittent Power |
| title_fullStr | An Electricity Market Model with Intermittent Power |
| title_full_unstemmed | An Electricity Market Model with Intermittent Power |
| title_short | An Electricity Market Model with Intermittent Power |
| title_sort | electricity market model with intermittent power |
| topic | electricity green energy power markets intermittent power |
| url | https://www.mdpi.com/1996-1073/18/6/1435 |
| work_keys_str_mv | AT rognvaldurhannesson anelectricitymarketmodelwithintermittentpower AT rognvaldurhannesson electricitymarketmodelwithintermittentpower |