Authors

Specific Nature of Price Competition at an Auction of Renewable Energy Sources (RES) in the EU

The article is devoted to the efficiency estimation of the deployment of RES auctions in the EU to reduce the RES generation cost and consequently the cost of its state support. The relevance of the study is due to the fact that to improve the efficiency of state support for RES generation in the EU, as the main driver of its development, since 2017 EU member states have been required to set its level at auctions. To achieve this goal, we analyzed the dependence of RES electricity prices at auctions in 14 EU member states (and separately in Germany and France) on the ratio of volume participating with volume requested and volume awarded as well as technology neutrality/specificity of auctions (number of competing technologies). The following results were obtained in the study. Firstly, both in the EU, as well as in Germany and France RES electricity prices were lower at auctions where volume participating exceed volume requested rather than volume awarded. The following conclusions were drawn. Competition at the auction arises when not all announced projects will receive support within the allocated amount of funding. Thus, more correct indicator of competition level at the auction is oversubscription of the auction. Secondly, in comparison to the EU, in Germany and France lower RES electricity prices were set at technology neutral auctions. Competition of technologies should lead to deployment of the most cost-efficient RES generating plants; therefore, the conclusion is drawn that in the absence of risks of suboptimal results priority should be given to technology neutral auctions. Read more...

Impact of the Abuse of Dominance in the EU Coupled Intraday Electricity Markets on the Integration of Renewable Energy Sources (RES)

The article is devoted to a problem of the abuse of dominance in the EU coupled intraday electricity markets and the consequences of such abuse for the integration of RES generation. The relevance of the study is due to the increased interest in the role of competition policy in achieving sustainable development goals. The problem under consideration is revealed by an example of an investigation by the UK Office of Gas and Electricity Markets (Ofgem) into EPEX electricity exchange about the abuse of dominance at coupled intraday auctions between Ireland and the UK. The following results were obtained in the study. Firstly, it is established that the abuse of dominance in coupled intraday electricity markets may manifest itself in access denial by the essential facility owner (EPEX) for its competitors (Nord Pool power exchange) to the necessary infrastructure for coupled intraday auctions (shared order book). Secondly, it is proven that the coupled intraday electricity market is an important mechanism for integrating RES generation into the energy system due to the possibility of real-time trading and optimization of cross-border capacity allocation between coupled markets. Thirdly, it is revealed that access denial for competitors to the shared order book for coupled intraday auctions reduces the liquidity of the considered market due to the cut-off of some bidders. It is shown that reduced liquidity of the intraday electricity market hinders elimination of imbalances in the energy system arising from the volatility of power generation from RES. Therefore, it is concluded that the violation of competition in the coupled intraday electricity markets via abuse of dominance can hinder the cost-effective integration of RES generation and greening of the power industry. Read more...