Electricity Market Design with Increasing Renewable Generation: Lessons from Alberta

Authors: David P. Brown, Derek E.H. Olmstead, Blake Shaffer.

Abstract: The electricity sector is going through a period of rapid transition with increasing decarbonization through the growth of renewable energy. In this paper, we consider the case of Alberta which has observed considerable growth in wind and solar generation. We summarize the attributes of Alberta’s simplified electricity market design and examine its challenges with increasing renewable output. We explore lessons from integrated market designs that account for the physical realities of the power system during market clearing, highlighting how this alternative market framework can help alleviate Alberta’s challenges. We note how features of this market design can promote a more reliable and cost-effective grid with increasing renewable energy.

Read the full article in The Electricity Journal, Volume 39, Issue 1.