6. The Decreasing Market Value of Variable Renewables: Integration Options and Deadlocks

  1. Prof. Detlef Stolten2,3 and
  2. Prof. Dr.-Ing. Viktor Scherer4
  1. Lion Hirth and
  2. Falko Ueckerdt

Published Online: 21 JUN 2013

DOI: 10.1002/9783527673872.ch6

Transition to Renewable Energy Systems

Transition to Renewable Energy Systems

How to Cite

Hirth, L. and Ueckerdt, F. (2013) The Decreasing Market Value of Variable Renewables: Integration Options and Deadlocks, in Transition to Renewable Energy Systems (eds D. Stolten and V. Scherer), Wiley-VCH Verlag GmbH & Co. KGaA, Weinheim, Germany. doi: 10.1002/9783527673872.ch6

Editor Information

  1. 2

    Forschungszentrum Jülich GmbH, IEF-3: Fuel Cells, Leo-Brandt-Straße, IEF-3: Fuel Cells, 52425 Jülich, Germany

  2. 3

    Forschungszentrum Jülich GmbH, IEK-3 Institut für En. & Klimaforschung, Wilhelm-Johnen-Str., 52428 Jülich, Germany

  3. 4

    Ruhr-Universität Bochum LS f. Energieanlagen, IB 3/126 Universitätsstr. 150 LS f. Energieanlagen, IB 3/126 44780 Bochum Germany

Author Information

  1. Strategic Analysis (FYCA), Vattenfall GmbH, Chausseestraße 23, 10115 Berlin, Germany

  1. The findings, interpretations, and conclusions expressed herein are those of the authors and do not necessarily reflect the views of Vattenfall or the Potsdam Institute.

Publication History

  1. Published Online: 21 JUN 2013
  2. Published Print: 28 MAY 2013

ISBN Information

Print ISBN: 9783527332397

Online ISBN: 9783527673872

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Keywords:

  • variable renewables;
  • market value;
  • integration costs;
  • integration options

Summary

Wind and solar power are variable renewable energy (VRE) sources in the sense that their output is variable and subject to forecasting errors, and that they are bound to certain sites. These three inherent properties reduce the income that VRE generators earn on markets (market value), especially at high penetration rates. The resulting lack of competitiveness could become a major barrier for the transition to renewable energy systems. This chapter explains the mechanisms that cause the decreasing market value, provides quantifications from model and market data, and discusses options to mitigate this value drop. Such integration options can be technological innovations, such as new storage technologies, based on investments in existing technologies, such as a shift in the generation mix from base-load to peak-load generators, or institutional, such as an appropriate design of spot and control power markets. A few deadlocks, decisions that could turn out costly once high VRE penetration is reached, are also discussed.