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Paving the way: how today´s policy decisions shape the evolution of electricity markets towards 2050. Insights from the Spanish case

T. Gerres, J.P. Chaves, F. Martín, M. Rivier, R. Cossent, A. Sánchez, T. Gómez

Electricity systems experience a period of transition towards decarbonisation and face multiple uncertainties. Variable renewable energy resources are experiencing a rapid cost decline while policy makers push for stricter decarbonisation targets to limit global warming and to comply with international commitments such as the 2015 Paris Agreement. In this context, a better understanding of how today´s policy decisions affect the future development of the electricity systems is essential. This paper presents the Spanish case study to explore the electricity system evolution towards 2050. An electricity system resource expansion model (SPLODER) is used to study different policies and estimate the evolution of investments and costs. Obtained results demonstrate the need to extend the current electricity market design to reach imposed shares of renewable generation and provide investment incentives in firm capacity. Furthermore, the electricity system is particularly sensible to energy policy decisions such as the lifetime extension of nuclear power plants, energy efficiency measures that reduce demand growth and technological developments.

Keywords: Decarbonisation targets; Remuneration mechanisms; Variable renewables; Energy-only markets; Electricity system model

Registration date: 2018-09-25


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