News & insights

As Variable Renewable Energy (VRE) penetration increases in poorly networked areas with suitable VRE resources, transmission constraints will increasingly force VRE curtailment. Under most European market access and pricing arrangements, location and operation decisions are based on average curtailment rates. As the marginal contribution of the last MW of VRE is 3+ times average curtailment, there is a risk of inefficient location and operation.

This article in Energy Policy, the International Journal of the Political, Economic, Planning, Environmental and Social Aspects of Energy, compares different pricing and access regimes (including nodal pricing) to compare their impact on the incentives for VRE merchant or market driven entry.