Electricity market model marginal cost output

Figure 15: Marginal cost of electricity, yearly average, €/MWh ST and GCA 2040 comparison

The marginal cost of electricity in the scenarios is primarily driven by assumptions on fuel and CO2 prices. The increases in zero marginal cost wind and solar power generation has significant impact on the average marginal cost of the system. Sustainable Transition is a low fuel price scenario, Global Climate Action captures a policy environment with a high CO2 price and in Distributed Generation, world energy fuel prices are highest. The higher fuel prices in Distributed Generation and Global Climate Action lead to higher marginal costs compared to the Sustainable Transition scenario, despite a significantly higher share of renewables in Distributed Generation and Global Climate Action. Fuel prices are explained in more detail in section 5.3.