Reconciling high renewable electricity ambitions with market economics and system operation: Lessons from Ireland's power system. (November 2019)

• Record Type: Journal Article
• Authors: Gaffney, F.; Deane, J.P.; Gallachóir, B.P.Ó.
• Is Part Of: Energy strategy reviews. Volume 26(2019)
• Publication Date: 2019-11
• Subjects: Target model -- I-SEM -- Electricity market transformation -- System services -- Capacity remuneration mechanism; Energy policy -- Periodicals; 333.7905
• DOI: 10.1016/j.esr.2019.100381
• Languages: English
• ISSNs: 2211-467X

Abstract

Abstract: The integration of variable generation challenges electricity systems globally. Using Ireland's electricity sector as a case study, we highlight multiple challenges in reconciling ambition for variable renewable integration with market economics and system operation. Ireland has the highest share of non-synchronous variable renewable electricity on a single synchronous power system. This case study examines the strategy being implemented to optimally balance between efficiency, flexibility and adequacy while maintaining a fully functional system that strives to adapt to evolving conditions. The transition that the Single Electricity Market underwent to comply with the EU Target Market was a major overhaul of what made the all-island market a success. Volume-based reliability options have distinct advantages over capacity payments. System services are critical for system stability and 14 separate system services are being developed. These actions, when taken together, provide an insight into the lengths to which this electricity market must go to transform from its cost-based nature to a value-based alternative that rewards flexible and reliable capacity with the ability to evolve with market conditions of the future. Highlights: Electricity market to become value-based; rewarding flexible, reliable participants. Climate mitigation policies are pushing up against technical limitation of the system. A complex system service arrangement to facilitate more variable renewables. Improved dynamism in the capacity market mechanism through financial options. I-SEM increases risk exposure and complexity for market participants.