The impact of virtual power plant technology composition on wholesale electricity prices: A comparative study of some European Union electricity markets.

Abstract Virtual Power Plant combines a wide variety of distributed generation resources and operates them as a unified resource on the energy markets. It gives an economic opportunity to renewable energy-based distributed generation, such as photovoltaic, small hydro or wind, as it can build a bridge to the integration of renewable resources in the wholesale electricity market. In this market, changes in the offers of portfolio electricity technologies affect wholesale electricity prices, since marginal generation costs are transmitted through to the wholesale market. This paper investigates the impact of energy-based distributed generation technologies composition on wholesale electricity prices variations of different EU energy markets by using a Maximum Entropy Econometric estimation procedure. To know how much each unit of electricity produced by each technology can alter the electricity price could be very useful to develop optimal strategies in an electricity technologies portfolio decision. Highlights • Virtual Power Plant (VPP) combines distributed generation resources (DG). • To know the effect of DG on electricity prices is useful to develop VPP strategies. • The impact of renewable DG on European wholesale electricity markets is quantified. • The Maximum Entropy Econometric approach is used. • Wind brings the most widespread market impacts across countries. [ABSTRACT FROM AUTHOR]