Granger Causality Network Methods for Analyzing Cross-Border Electricity Trading between Greece, Italy, and Bulgaria

George P. Papaioannou, Christos Dikaiakos, Christos Kaskouras, George Evangelidis and Fotios Georgakis
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George P. Papaioannou: Research, Technology & Development Department, Independent Power Transmission Operator (IPTO) S.A., 104 43 Athens, Greece
Christos Dikaiakos: Research, Technology & Development Department, Independent Power Transmission Operator (IPTO) S.A., 104 43 Athens, Greece
Christos Kaskouras: Research, Technology & Development Department, Independent Power Transmission Operator (IPTO) S.A., 104 43 Athens, Greece
George Evangelidis: Department of Transmission System Operations & Control, Independent Power Transmission Operator (IPTO) S.A., 104 43 Athens, Greece
Fotios Georgakis: Market Management Department, Independent Power Transmission Operator (IPTO) S.A., 104 43 Athens, Greece

Energies, 2020, vol. 13, issue 4, 1-26

Abstract: Italy, Greece, and, to a lesser degree, Bulgaria have experienced fast growth in their renewable generation capacity (RESc) over the last several years. The consequences of this fact include a decrease in spot wholesale prices in electricity markets and a significant effect on cross border trading (CBT) among neighboring interconnected countries. In this work, we empirically analyzed historical data on fundamental market variables (i.e., spot prices, load, RES generation) as well as CBT data (imports, exports, commercial schedules, net transfer capacities, etc.) on the Greek, Italian, and Bulgarian electricity markets by applying the Granger causality connectivity analysis (GCCA) approach. The aim of this analysis was to detect all possible interactions among the abovementioned variables, focusing in particular on the effects of growing shares of RES generation on the commercial electricity trading among the abovementioned countries for the period 2015–2018. The key findings of this paper are summarized as the following: The RES generation in Italy, for the period examined, drives the spot prices in Greece via commercial schedules. In addition, on average, spot price fluctuations do not affect the commercial schedules of energy trading between Greece and Bulgaria.

Keywords: cross border trading; Granger causality; electricity trading; spot prices (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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