The Effects of Electricity Generation from Solar and Wind Energy on the Day Ahead Market-Clearing Prices and Price Volatility: The Turkish Case

Mustafa ÇaÄŸrı Peker and AyÅŸen Sä°vrä°kaya

Fiscaoeconomia, 2023, issue 2

Abstract: Solar and wind generation are the primary tools to prevent climate change and high carbon emissions. Due to their intermittent generation characteristics, solar and wind power plants have a different impact on the market-clearing price formation compared to conventional generation sources. The paper investigates the solar and wind generation effect on the day ahead market-clearing price in Turkey between the 2016 and 2022. We used a 2nd order polynomial learner model to analyze the impact of solar and wind generation level on the market-clearing price level and volatility. We find that Dutch TTF increases market-clearing price with a coefficient of 0.24. An increase in wind and solar generation reduce the market-clearing price. Solar generation is ineffective on the market-clearing price below a certain demand level. Wind generation reduces market-clearing price with a 37.78 coefficient at low demand levels and a 6.55 coefficient at high demand levels. Solar generation has a price-reducing effect with 5.55 at high demand levels. Finally, Dutch TTF and wind generation increased volatility with coefficients of 0.04 and 0.69; solar generation reduced volatility with a coefficient of 0.83.

Keywords: Solar; Wind; Market-clearing Price; Wholesale Electricity Markets; Day Ahead Market (search for similar items in EconPapers)
JEL-codes: C58 G17 Q42 Q54 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://dergipark.org.tr/en/download/article-file/2816932

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fis:journl:230205

DOI: 10.25295/fsecon.1215578

Access Statistics for this article

More articles in Fiscaoeconomia from Tubitak Ulakbim JournalPark (Dergipark)
Bibliographic data for series maintained by Emre Atsan ().