The long-term impact of increased fossil fuel prices and market design on the market values of renewable generation

Following Russia's invasion of Ukraine in 2022, European countries took significant steps to reduce their reliance on energy imports from Russia, particularly in the gas and coal sectors. At the same time, to import less primary energy in the future, some countries have adopted new renewable energy targets. The question is to what extent the increase in gas and coal prices can contribute to refinancing renewable energy on the electricity wholesale market. To investigate this, an agent-based approach is used to examine the market values of renewable energies in several European countries until 2040. It is shown that increased expansion targets have a more substantial negative impact on the market values of renewable energies than increased gas and coal prices have a positive effect. In addition, it is observed that the introduction of capacity markets does not significantly influence market values and wholesale electricity prices in the medium term. However, by 2040, lower electrici