 Spatial merit order effects of renewables in the Italian power exchangeRita De Siano and Alessandro Sapio Energy Economics, 2022, vol. 108, issue C Abstract: Estimating the merit order effect of renewable energy sources provides key information inputs in several domains, notably in the design of green energy policies. Given the spatial nature of electricity supply and demand, it is important to disentangle the direct effect of renewables on zonal electricity prices from spatial spillovers. In this paper, we estimate spatial econometric models of the Italian zonal electricity prices, using IPEx daily average prices in the time window 2009–2015, for 6 market zones. The best specification is a spatial Durbin model including wind power, solar power, and hydropower production, as well as control variables. The model is estimated under different assumptions on the spatial-weighting matrix and in 3 sub-periods. Direct and indirect merit order effects are found stronger over time, especially for wind power; but the estimated merit order effect is smaller than in non-spatial models, suggesting that our analysis is capable of accounting for spatial spillovers. Keywords: Electricity prices; Renewables; Merit order effect; Market integration; Spatial econometrics (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:108:y:2022:i:c:s0140988322000172 DOI: 10.1016/j.eneco.2022.105827 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.