The future energy system is challenged by the intermittent nature of renewables and requires therefore several flexibility options. Still, the interaction between different options, the optimal portfolio and the impact on environment and society are unknown. It is thus the core objective of REFLEX to analyse and evaluate the development towards a low-carbon energy system with focus on flexibility options in the EU to support the implementation of the SET-Plan. As concerns about the adequacy of electricity generation are rising in Europe, decision makers try to support new investments in generating capacities and incentivize demand side flexibility (e.g. demand response or storages). As this process is still ongoing and there exists a broad variety of options, the goal of the EU funded REFLEX project published a paper to provide an up-to-date overview of currently implemented or proposed market design options in European electricity markets and other already established design options outside Europe.
Large shares of volatile energy production from wind power and photovoltaics are challenging the electricity system and lead to decreasing electricity wholesale prices. Due to the meritorder-effect, in hours with electricity feed-in from renewable energy sources wholesale prices decline significantly. Additionally, electricity generation from renewable energy sources leads to fewer full-load hours of conventional power plants. The liberalized market combined with the European market coupling increases the efficient use of generation resources and reduces returns for power generators in times without scarcity. However, returns above variable costs are necessary to cover fixed costs, otherwise, power plants will be decommissioned for economic reasons. But flexible power plants in combination with other flexibility options, such as demand response or storages, are important for ensuring generation adequacy during scarcity situations.