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Market Designs for High Levels of Variable Generation

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Michael Milligan, Hanelle Holttinen, Antje Orths, Muirrean Lynch, Lennart Soder
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This paper reviews the state of electricity markets in Europe and the United States in light of the challenges brought forward by variable renewable generation. It first presents an overview of these challenges, particularly in ensuring sufficient capacity and flexibility from conventional technologies. It then reviews current EU and U.S. market structures and the impact of increased penetration of variable generation. Finally, the authors consider the future of electric markets in both regions and the challenges of testing new market designs.