A methodology for analysis of the renewable electricity feed-in tariff markets

•We create a new methodology for correcting the guaranteed price.•We define the cost effectiveness ratio of the market to non-market model.•We design several market models and select the one to replace non-market model. A feed-in tariff model has been enacted in most countries and is well accepted by the European Commission. In principle, the model offers long-term contracts to eligible renewable energy producers, typically based on guaranteed prices for fixed periods of time for electricity produced from renewable energy. This paper presents a methodology that has been developed for the feed-in tariff market approach, which should gradually help eligible producers become better prepared for market competition after long-term contracts expire. The central part of this methodology is the correction of the current guaranteed prices, based on the calculation of the cost-effectiveness ratio of the market model to the current feed-in tariff or non-market model. The common features of the designed market models are the market component, a combination of the guaranteed price with and without market indexing, and the sum of the reduced guaranteed price and the spot electricity price. The methodology has been applied to the current non-market model implemented under Croatian jurisdiction. In this case, seven different market models were designed, which are compared to the existing non-market model. The results of the cost-effectiveness ratio according to different types of renewable energy and market models for a certain period of time are given, described and used for the correction of the current guaranteed price. The first market model has been selected as the most appropriate to replace the existing non-market model in Croatia.