On the impact of increasing penetration of variable renewables on electricity spot price extremes in Australia

摘要: In energy-only electricity markets, such as Australia's National Electricity Market (NEM), it has been argued that an increasing penetration of variable renewable energy (VRE) generation is likely to have two effects: (i) more extreme spot prices, with greater instances both very high and low prices (ii) a need increase the market price cap (MPC) related signals for reliability. This article examines validity these effects using pricing outcomes in South Australia (SA), which one highest VRE penetrations worldwide. We find partial support effects. While extremely become frequent over time, less frequent. Spot volatility risen, consistent hypothesis, but not because extreme. Furthermore, findings are observed all NEM regions, just SA. Also, reliability remained past decade despite MPC remaining constant real terms. provide four reasons why higher result MPCs: investment volatility-dampening, reliability-enhancing technologies like storage interconnectors; increased contract cover; (iii) price-responsive demand; (iv) emergence additional ancillary service revenues. These implications durability NEM's design given expected further increases rates across NEM.