Lappeenranta University of Technology


Analysis of capacity remuneration mechanisms in Europe from the perspective of the internal European market for electricity

Increasing volumes of  intermittent generation present significant challenges, including: adjusting the output from conventional plant to match a more variable net demand, paying for a larger volume of rarely needed reserve plant, and increased price volatility. As a consequence, several EU Member States have recently announced plans for the introduction of capacity remuneration mechanisms.

Elfrosk Market Design commissioned Satu Viljanen and Olga Gore to conduct a study that includes:
  • An overview of current European discussions on capacity remuneration mechanisms, including national and or regional goals and their roles in the implementation o national mechanisms.
  • The effient use of interconnector capacity including the impact of capacity mechanisms on cross-border flows
  • The impact of capacity remuneration mechanisms on investments in interconnector capacity and new electricity generation
  • The potential distortionary impact of different types of capacity mechanisms on the market integration process
The final report will be published in eary 2014. 
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Optimization of wind farm design taking into account uncertainty in input parameters

This paper is about the optimization of wind farm design including risk assessment. The net present value (NPV) is used to evaluate the yield of the laid-down capital of the wind farm. Monte Carlo simulation method is applied to obtain probability distribution of the objective function. The uncertainties of the wind speed and direction and power curve of the wind turbine are studied by incorporating them in the annual energy production (AEP) uncertainty, which can be directly translated into NPV uncertainty. Differential Evolution (DE) is used as the optimization algorithm.

Authors: Afanasyeva Svetlana, Saari Jussi, Kukkonen Saku, Partanen Jarmo, Pyrhönen Olli. 
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Institutional analysis of wind power in Finland

Wind power is the second largest source of renewable electricity generation in the EU. Despite strategic energy plans, including a new feed-in tariff scheme, Finland’s installed wind power capacity (197 MW) and its share in the gross electricity consumption (0.5%) is at the bottom of the EU27. 

This paper investigates the reasons behind a lack of investment in electricity generation from wind power in Finland using institutional economics approaches. After the analysis of formal rules at European and national level, three levels of institutions affecting wind power investments in Finland are identified: legislative and executive, governance structure, and individuals. Further, informal rules are identified from five semi-structured interviews with key informants from governance structure and individuallevel institutions. The findings - structured according to three institutional aspects: policy, technology, and economics - reveal multiple implications about the industry structure, municipal and regional governance, and public acceptance.

Authors: Viljainen, Satu; Jantunen, Ari
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