Essays on Renewable Energy in Liberalized Electricity Markets

The aim of this dissertation is to analyze different specific issues which arise due to the availability of renewable electricity generation along the unbundled supply chain of the power sector. Building on that, possible improvements of the market design and regulation with respect to the integration of weather-dependent renewable energy are identified. The thesis consists of three main chapters, each based on a single paper. The first chapter analyzes coordination problems between investment into grid infrastructure and investment into electricity generation based on weather-dependent renewable energy. As investments into renewable generation capacities are largely driven by subsidy mechanisms in practice, the chapter focuses on the influence of different subsidy schemes on the locational choice of renewable energy investors and the resulting implications on grid investment. The second chapter shifts the focus to the retail part of the supply chain of liberalized electricity systems. More specifically it is analyzed how the availability of distributed generation technologies such as rooftop photovoltaic systems or small-scale wind power plants impacts imperfect retail markets for electricity. The third chapter focuses on the question how electricity generation based on weather-dependent renewable energy sources can contribute to reliability in power systems. The presented analysis contributes to this question by developing a new methodology to endogenously determine the capacity value of generation capacities based on variable renewable energy in large-scale optimization models for electricity markets