NANCY Seminar – Sai BRAVO-MELGAREJO (CEA I-Tésé and Université Paris Saclay)
The 2026/10/13
From 11:00am to 12:30pm
Event details :
Title: Renewables Expansion and Intertemporal Market Dynamics in a Low-Carbon Power System
Abstract: The deployment of intermittent renewables generates system-wide effects that extend beyond standard merit-order displacement. This paper studies the non-contemporaneous, system-wide impact of an extra MWh of daily wind and solar generation on the French day-ahead market over 2015–2024. France’s low-carbon system is a relevant benchmark for future electricity markets, particularly amid renewed interest in nuclear investment. To identify these effects, I develop a novel instrumental variables strategy based on counterfactual production potential, constructed by combining meteorological conditions with geographically disaggregated, time-varying installed capacity. This capacity-weighted potential overcomes the endogeneity introduced by curtailment, while exploiting rather than controlling for the trend induced by capacity deployment. I find that wind displaces high-marginal-cost thermal generation with little intertemporal spillovers, while solar induces a “flexibility tax” as the sun sets. Indeed, nuclear and storage are forced to absorb the resulting ramping needs, with costs reappearing in shoulder and nighttime hours. Overall, these findings show that focusing solely on intensive variation provides an incomplete measure of the system value of renewables. Yet, current market designs do not explicitly price the downward flexibility required to integrate solar generation.
