Ambitious policy targets together with current and projected high growth rates indicate that future power systems will likely show substantially increased generation from renewable energy sources. A large share will come from the variable renewable energy (VRE) sources wind and solar...

This paper estimates the welfare-optimal market share of wind and solar power, explicitly taking into account their output variability. We present a theoretical valuation framework that consistently accounts for output variability over time, forecast errors, and the location of generators in the...

Several studies have shown that the revenues of wind and solar power generators on spot markets (“market value”) decline with increasing deployment. This “value drop” is often discussed quantitatively but infrequently analytically, a gap that this paper aims to fill. We derive a formal...