Cannibalization, depredation, and market remuneration of power plants Articles uri icon

publication date

  • August 2022

start page

  • 1

end page

  • 14

volume

  • 167

International Standard Serial Number (ISSN)

  • 0301-4215

Electronic International Standard Serial Number (EISSN)

  • 1873-6777

abstract

  • The decarbonization strategy of the electricity sector relies on renewable energy. However, increasing renewables gives cannibalization and depredation effects. Cannibalization appears when increasing penetration of renewables undermines their own market remuneration. Depredation arises when increased renewable penetration undermines the market remuneration of other technologies. This paper documents cannibalization and depredation effects in the Spanish electricity market from 2014 to 2020. Increases in wind and solar penetration reduce market remuneration of all technologies. With wind, depredation and cannibalization effects are non-linear. Higher solar and wind penetration reduces remuneration volatility to wind, solar, and gas but increases those of coal and nuclear.

keywords

  • cannibalization effect; depredation effect; renewable energy; market remuneration