Challenges of Electric Energy Markets

Strategic Studies

ABSTRACT: The Challenges of Electric Energy Markets

This study reviews the electricity market’s structure, its operational mechanisms and the implications of an ever-increasing share of renewables in the energy mix. The alternative business model that renewables demand,  in terms of marginal costs and government subsidies in the form of out-of-market preferential tariffs, has led to a disruption of electricity markets which has seen wholesale prices drop while final consumer prices have risen significantly, aswell as damaging traditional power producers and energy security as a whole. From a GCC perspective, Gulf countries can benefit from renewable energy without any of these consequences due to the nature of the electricity sector in these countries.

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