The Effect of Intermittent Renewable Energy Generation on Electricity Prices: A Literature Survey

Blandina C. R. Oliveira () and Adelino Fortunato ()
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Blandina C. R. Oliveira: Polytechnic of Leiria, School of Technology and Management CEFAGE-UE
Adelino Fortunato: University of Coimbra, CeBER, Faculty of Economics

Notas Económicas, 2021, issue 53, 73-83

Abstract: Despite increasing deployment of intermittent renewable energies at lower generation costs, wholesale electricity price has been falling while retail electricity prices go up. This has triggered the debate on the cost-effectiveness of this source of energy. Therefore, the aim of this paper is to present a literature survey on the effect of intermittent renewable energy generation on electricity prices. Researches have used different methodological approaches, different periods and countries to examine the impacts of intermittent renewable energy on electricity prices. Most of the studies found evidence of the merit-order effect, which means that an increase in intermittent source generation would reduce the spot electricity market price. Finally, the few studies that address the retail market found that retail electricity could either increase or decrease.

Keywords: Electricity market; intermittent renewable energy; electricity prices. (search for similar items in EconPapers)
JEL-codes: L11 O38 Q41 (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2021:i:53:p:73:83

DOI: 10.14195/2183-203X_53_5

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