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Market Design in a Zero Marginal Cost Intermittent Renewable Future
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Program on Energy and Sustainable Development, page(s): 21

June 30, 2020

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The basic features of an efficient short-term wholesale market design do not need to change to accommodate a significantly larger share of zero marginal cost intermittent renewable energy from wind and solar resources. A large share of controllable zero marginal cost generation does not create any additional market design challenge relative to a market with a large share of controllable positive marginal cost generation. In both instances, generation unit owners must recover their fixed costs from sales of energy, ancillary services, and long-term resource adequacy products.

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