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Electricity market despatch modelling suggests that as more wind power comes on to the system, average wholesale prices will decline slightly, due to there being more low short-run marginal cost plant (i.e. wind) on the system. For example, research by Redpoint consultants for DECC in 2009(1 )examined a low renewable electricity scenario (reaching around 16% in 2020) and a high scenario (reaching around 29% in 2020). They found that average wholesale prices from 2011 to 2030 were 4% lower in the high renewable scenario than in the low. The average wholesale price that flexible conventional generators receive is likely to be higher than the overall market average as they will run more at periods of higher prices.
The Government is taking powers to introduce a capacity market which will be able to ensure that sufficient capacity is available to meet demand. Conventional generators would receive a relatively stable capacity payment instead of just relying on uncertain and volatile prices from an energy only market. This would help to increase certainty of income for conventional generators.
http://www.decc.gov.uk/assets/decc/what%20we%20do/uk%20energy%20supply/energy%20mix/renewable%20energy/ renewable%20energy%20strategy/1_20090715120542_e_ @@_redpointimplementationoftheeu2020renewables targetintheukelectricitysectorroreform.pdf