As a consequence of Europe’s climate and energy agenda, the EU will generate some 50 percent of its electricity from renewables by 2030. By 2050, its power system will have to be completely carbon-free. Decarbonisation rests on continuous investments in solar photovoltaics and wind power. Usually it is expected that the energy market will deliver these investments, in combination with the emissions trading system. In this paper, Agora Energiewende argues that this rather theoretical view to power market design is not the way forward. Instead, a more pragmatic approach is needed, that takes into account the complex practical, political, and economic challenges of the transition towards a carbon-free power system. Thus, Agora Energiewende proposes to think of the future European market design as a Power Market Pentagon.

Publication details

AuthorMatthias Buck et al.
PublisherAgora Energiewende
Release dateApril 2016