Melting-pots and salad bowls: The current debate on electricity market design for integration of intermittent RES

• There are two main paradigms for RES integration: melting-pot and salad-bowl.
• There is no fundamental obstacle to melting-pot integration.
• Need to value flexibility: time granularity, balancing markets, capacity mechanism.
• Flexibility is needed locally: space granularity and local management are key.

This paper discusses a series of issues regarding the integration of intermittent renewables into European electricity markets. As intermittent renewables constitute a significant share of the generation mix, they cannot be kept isolated from the market. We argue that RES integration is an issue of economic efficiency, and we review the main frameworks that have emerged in the literature. We first consider to what extent intermittent resources should be treated as dispatchable resources. We then analyse the different tools that have been proposed to ensure the required flexibility would be delivered, with an emphasis on the redefinition of time and space, joint optimisation of reserve products and energy products, and Capacity Remuneration Mechanisms.