Negative market prices and market premium support schemes - impacts on wind integration in the German electricity market

Future extension of renewable capacity can lead to surplus situation leading to more than 4,000 GWh not remunerated energy due to current market regulation and wind power support schemes. This can lead to inefficient dispatch decisions of wind power plants because no market premiums are payed during longer time periods of negative market prices. The result can be reduced wind power generation and increased conventional generation. Furthermore incentives for flexibility in the power market are reduced and costs for integration of wind energy are increased.