Designing New Energy Markets to Promote Renewables

Abstract

The drive toward decarbonization has spurred the growth of renewable energy sources, reshaping energy production and consumption patterns. As the energy landscape evolves, so must the market design supporting it to steer the integration of renewable energy. Addressing the challenges of promoting distributed renewable energy is paramount for developing a cleaner energy system and meeting decarbonization targets. This study presents a modern market design that efficiently integrates renewable energy sources, long-term contracts, and flexibility technologies into a single evolved market framework. The approach described herein provides proper price signals for diverse assets and decouples renewable energy from fossil fuels, ensuring economic viability and efficient integration. Taking into consideration key barriers and drivers, the findings provide insights for perfecting energy markets, meeting decarbonization targets, and guiding policymaking to boost cleaner energy systems.

Keywords: market design, distributed energy resources, renewable energy sources, green deal, decarbonization, energy policy