We develop an algorithm that simulates by iterative splitting the hourly equilibrium (price-quantity) of the Italian day-ahead market. The algorithm is employed to study the sensitivity of equilibria to changes in production from renewable units at different locations. We show that, when power...

The literature demonstrates the likely reduction of wholesale electricity prices due to a larger penetration of renewable energy sources (RES). When markets are organized as two or more inter-connected sub-markets within a larger power market the final impact of increasing RES production may be...