The rise of power production from non-programmable renewable power sources imply a reduction in power price and an increasing stress to the power system. In the paper the impact of new investments in variable renewable energy sources on the Italian electricity system is evaluated. In order to do so, demand and supply curves of the day-ahead market of some representative days and periods of the year are simulated taking into account the introduction of new solar and wind power plants in the offer curve, as well the zonal configuration of the Italian market and the transmission constraints. Results show that new renewable investments significantly affect electricity prices but only in the southernmost Italian zones. However, the North zone, which accounts for the majority of all Italian load, shows a comparatively lower benefit from the investments, particularly in those months and hours of the day in which there is a limited supply of wind power. Limited transmission capacity to transfer power from the south towards north of Italy worsen this. Conversely, the southernmost zones and islands benefit from photovoltaic and wind power investments, reducing prices. However, high production in these regions, coupled with transmission constraints, leads also to high curtailments when generation exceeds demand. Finally, the planned transmission capacity expansion is also considered. It is shown that it further reduces the prices in the northernmost zones, yet it is not enough to fully transfer the positive impact on prices in southernmost zones or to reduce the curtailments, which can be as high as 60% of the new capacity in some zones.
