When the supply of intermittent renewable energies like wind and solar is high, the electricity price is low. Conversely, prices are high when their supply is low. This reduces the pro t potential in renewable energies and, therefore, incentives to invest in renewable capacities. Nevertheless,...

We extend the theory of peak-load pricing by considering that the production with different technologies can be adjusted within their capacity at different speeds. In the established analysis, all production decisions can be made after the random variables realize. In our setting, in contrast,...

Most electricity systems face contractual fixed consumer prices in the short term, that is, load and price are fixed before the random supply of renewables like wind or solar realizes. Steam power plants also make production decisions before such a random supply realizes. These capacities cannot...

We consider an economy in which competitive firms use three technologies for electricity production: pollutive fossils, intermittent renewables like wind or solar, and storage. We determine optimal subsidies for renewables and storage capacities when carbon pricing is imperfect. This policy is...