It indeed analyzed renewable energy support schemes and their interaction with electricity markets and cross-border flows:
feed-in tariffs (FIT) support schemes are assumed to provide a fixed, regulated remuneration for each generated MWh as well as priority dispatch. A separate entity is responsible for balancing the energy on the markets (and usually sells it at the market area minimum authorized price).
the price premium (PP) support scheme provides renewables with a fixed bonus for each generated MWh in addition to revenues from the commercial sale of this energy. This bonus may either be a financial bonus, or for example tradable green certificates (TGC). The generation units do not enjoy priority dispatch under this scheme.
The study is first conducted on an isolated Belgium France system. The level of intermittent generation was changed from pessimistic levels to very optimistic (unrealistic) levels, while the conventional generation setup did not change.
Under very large levels of intermittent renewable energy integration, consumer surplus decreased (fewer negative price peaks occurred), while producer surplus increased (more generation flexibility offered to the system) when switching from FIT to PP. Starting at very low RES penetration, the congestion revenue first increased with increasing levels of renewables, and then decreased at unrealistically high levels. The increase was first due to the fact that more flexible and expensive units had to be used to deal with flexibility, but when increasing further the level of renewables development, such flexible generation units being well spread across the two countries, the need for exchanges decreased (because most of the load was supplied using renewables).
Besides, a very high level of intermittent renewables led to higher cross-border flows during high time periods when a lot of wind power was generated. The renewable energy support scheme impacted cross-border flows up to approximately 5%.
In a similar way, CO2 emissions were found to first decrease when moving from low to expected level of RES, then increased again with a very high level of renewables: first of all, flexible (and polluting) units were shed, and then base load (less polluting) units could not cope with renewables and had to be substituted with flexible (polluting) units. In this very high RES case, the PP scheme offered more flexibility and led to slightly smaller CO2 emissions. The nonlinear results displayed above stress the need to simulate markets at different RES penetration levels. Extrapolation from other penetration levels would not yield the same results.
Overall, the level of intermittent penetration does impact social welfare more than the renewable energy support scheme. The support scheme however has a large impact on the overall system for very large renewable penetration levels. The impact of the support scheme on cross-border flows largely depends on the intermittent generation location: should one country own a larger share (as currently for Germany in CWE), the impact may be very significant.