Price formation and cost recovery in electricity markets dominated by variable renewable energy and energy storage

Thursday, March 16, 2023 - 4:00pm

Event Calendar Category

Other LIDS Events

Speaker Name

Magnus Korpås & Guillaume Tarel


NTNU & Hydro Québec

Building and Room Number



This presentation addresses electricity price formation in competitive markets when introducing generation from variable renewable energy (VRE) technologies with zero marginal cost and electric energy storage systems. The presentation will be two-fold. In the first part, we will briefly revisit the theoretical basis of power market equilibrium in systems with thermal generation, before presenting our ongoing work on cost recovery and market designs for a simple 100 % VRE system. In the second part, we present recent research on how demand flexibility and uncertainty of VRE output influence prices and dispatch of storage and thermal generation in example case studies from Europe.


Magnus Korpås is a Professor in Electric Power Engineering at the Norwegian University of Science and Technology (NTNU), where he established the research group on Electricity Markets and Energy System Planning. His research interests include renewable energy integration, energy storage, power markets and hydropower planning. He received the Ph.D. degree from NTNU in 2004 and he is former Research Director at SINTEF Energy Research. Currently he is main supervisor for 10 PhD students, teaches a graduate course in power markets and participates in several collaborative energy research projects at national and European level. In 2018-2019, he was visiting scholar at MIT, Laboratory of Information and Decision Systems (LIDS). He is leading the Markets Work Package in IEA TCP Wind Task 25 “Large-scale Integration of Variable Renewable Energy in Energy Systems” as well as the the scientific committee of the Norwegian Research Centre on Intelligent Electricity Distribution (CINELDI).

Guillaume Tarel, Eng., PhD, is a transmission planning engineer at Hydro Québec, Canada. Guillaume holds a MSc in engineering from the École Centrale in Paris, and a MSc and PhD in theoretical physics (2011) from the Swiss Federal Institute of technology. Since then, he has worked as an electrical engineer in various countries mostly in the fields of generation planning, resource adequacy and transmission planning. As a side activity, he does research on renewable integration and power systems economics.