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RES integration in the IEM can deliver secure, affordable and competitive energy in the EU

RES integration in the IEM can deliver secure, affordable and competitive energy in the EU. Commercial dispatch can increase value and reduce required support Allowing RES output to be moderated would increase its value (i.e. it would not have to run at a negative price)

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RES integration in the IEM can deliver secure, affordable and competitive energy in the EU

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  1. RES integration in the IEM can deliver secure, affordable and competitive energy in the EU • Commercial dispatch can increase value and reduce required support • Allowing RES output to be moderated would increase its value (i.e. it would not have to run at a negative price) • Removing artificial downside makes RES capacity more tradable in forward markets: • more wholesale liquidity • easier for RES to get off-take contracts • price transparency • capacity adequacy FIT-based vs. commercial dispatch Output MWh Output MWh Price Euro/MWh Price Euro/MWh OUTPUT = 94 MARKET VALUE =126 OUTPUT = 100 MARKET VALUE =100

  2. What EFET expects from Market4RES: Working towards a world without RES support (fin. & dispatch) • DESIRABLE OBJECTIVES: • EU targets for 2030, not national • Convergence of support schemes • No cross-border restrictions on trade in RES generation • All RES sold into the market by producers • RES producers with balance responsibility (like other generators) • “Priority dispatch” should evolve towards a situation where RES can always connect and dispatch if it wants to i.e. it is a commercial decision 100% No subsidy (beyond ETS and R&D) No priority dispatch % of support coming from Premiums or Certificates Commercial priority dispatch Feed in tariffs Absolute priority dispatch 2050 2040 2020 2030

  3. Main market drivers • Patchwork approaches in RES support schemes threaten the effectiveness of the internal energy market: • possible distortion of price signals in the energy (MWh) market (forward, DA and ID) will negatively affect market liquidity • dilution of MWh price signals could also damage incentives to invest in reliable and flexible power generation means (vicious circle) • Balancing NC and Pilot projects should pave the way towards RES balancing responsibility (taking into account the emergence of aggregators) • Cross-border tradability of RES attributes should increase the participation to and the liquidity of intraday and day-ahead markets • Integration of RES will favour appropriate forward market price signals, promote investment and reduce the need for capacity mechanisms

  4. Thanks for your attention European Federation of Energy TradersAmstelveenseweg 9981081 JS AmsterdamTel: +31 (0)20 5207970Email: secretariat@efet.org www.efet.org

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