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WORKSHOP ON MARKET DESIGNS FOR LOW-CARBON ELECTRICITY GENERATION

Monday 14 March 2016, 14h00-18h30
Université Paris-Dauphine
Salle A 709, Nouvelle Aile
7th Floor


SUMMARY:
Today, the defining challenge of electricity markets in Europe and elsewhere is to ensure progressive decarbonisation of power supplies while guaranteeing high levels of security of supply at affordable costs. However, under the present design of European electricity markets there is little chance of less carbon-intensive generation forthcoming based on the basis of market prices. Not only are prices low for all generators, but low carbon generation technologies such as wind, solar, nuclear, hydro, carbon capture and storage but also ancillary technologies such as electric storage or energy efficiency, are characterized by high capital intensity.

The resulting high fixed costs increase financial risks for investors facing volatile prices. This puts low carbon technologies at a competitive disadvantage in liberalised energy-only markets. In principle, this disadvantage could be partly compensated by appropriate carbon prices. However, carbon prices in the EU ETS hovering below € 10 per tonne of carbon are clearly insufficient to make low carbon technologies competitive in combination with prices on current energy-only markets. With few exceptions, the deployment of low carbon technologies is thus dependent on national arrangements that allow for out-of-market finance with guaranteed rates for the electricity they produce.

This is an inefficient and haphazard manner to promote decarbonisation with complex and unpredictable outcomes. In the absence of both coherent conceptualisation and dedicated policy pronouncements, the proliferation of ad hoc support mechanisms also seriously undermines the integrity, transparency and efficiency of the common European electricity market.

The issue has naturally generated wide-spread interest among electricity market experts and academic researchers. Since about two years also a number of studies have been initiated that not only provide an analysis of the shortcomings of the process of overlaying market outcomes with targeted interventions but also provide proposals for alternative market designs on a coherent and transparent basis.

The Chaire European Electricity Markets (CEEM) of the Université Paris-Dauphine has thus invited a number of leading researchers and authors of recent studies to present their proposals aiming to establish new market frameworks that would allow low carbon technologies to substitute progressively for fossil fuel-based power generation. The debate is no longer whether the current framework is able to produce satisfactory outcomes on its own. Permanent meddling has shown that it is not. The challenge is now to identify the elements that can be part of a coherent and transparent European market design for low carbon electricity generation in the future.


PROGRAMME AND PRESENTATIONS
13h30 – 14h00 Reception of participants

14h00 – 14h20 Introductory Address: Key Elements of Market Designs for Low Carbon Technologies
Jan Horst Keppler, Scientific Director, Chaire European Electricity Markets (CEEM), Université Paris-Dauphine.
Presentation

14h20 – 15h00 Nuclear New Build: Insights into Financing and Project Management
Marco Cometto, Economist, OECD Nuclear Energy Agency (NEA)
Presentation

15h00 - 15h40 Market Design for High Shares of Renewables: Is Radical Change Required?
Fabien Roques, Senior Vice President at FTI- Compass Lexecon and Associate Professor, Université Paris-Dauphine
Présentation

15h40 -16h20 Risk and Capital Cost Considerations in Designing Efficient Support Schemes
Aurèle Fontaine, Senior Economic Expert, RTE
Presentation

16h20 - 16h40 Coffee Break

16h40 – 17h20 The Impact of Carbon Pricing for Low Carbon Investment in Developing Countries: The Need to Align Power System Regulation
Dominique Finon, Scientific Counsellor, CEEM and CIRED
Presentation


17h20 – 18h00 Re-powering Markets: Market Design and Regulation during the Transition to Low-Carbon Power Systems
Manuel Baritaud, Senior Energy Analyst, International Energy Agency (IEA)
Presentation

18h00 - 18h30 Roundtable with Pierre Dechamps (Policy Officer, DG Research and Innovation, European Commission), Thomas Veyrenc (Director, Markets Department, RTE), Marc Bussieras (Director, Corporate Strategy, EDF), Philippe Vassilopoulos (Head of Product Design, EPEX SPOT) and Vincent Pichon (Directeur de projets, Département de la Stratégie, Groupe Caisse des Dépôts (CDC))

18h30 Cocktail Reception, Espace 7, Université Paris- Dauphine, 7th Floor (Nouvelle aile)


For more information, please contact the Coordinator of the CEEM:
Fatoumata Diallo
fatoumata.diallo@fondation-dauphine.fr
Fondation partenariale Paris-Dauphine
Place du Maréchal de Lattre de Tassigny-75116 Paris Cedex
Tél. +33 (0)1 44 05 45 54

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Contact

Chaire European Electricity Markets
Fondation Paris-Dauphine
Place du Maréchal de Lattre de Tassigny
75775 Paris Cedex 16

Steve Serafino, CEEM Coordinator:
steve.serafino@dauphine.psl.eu
+33(1)44.05.45.54

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