Statistical Analysis of Electricity Prices in Germany Using Benford’s Law

Marek Pavlík, Matej Bereš (), Ardian Hyseni and Jaroslav Petráš
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Marek Pavlík: Department of Electric Power Engineering, Technical University of Košice, 04001 Košice, Slovakia
Matej Bereš: Department of Theoretical and Industrial Electrical Engineering, Technical University of Košice, 04001 Košice, Slovakia
Ardian Hyseni: Department of Electric Power Engineering, Technical University of Košice, 04001 Košice, Slovakia
Jaroslav Petráš: Department of Electric Power Engineering, Technical University of Košice, 04001 Košice, Slovakia

Energies, 2024, vol. 17, issue 18, 1-20

Abstract: The year 2022 was marked by a significant increase in electricity prices in Germany, with prices reaching extreme levels due to various geopolitical and climatic factors. This research analyzes the evolution of electricity prices in Germany from 2015 to 2024 and applies Benford’s Law to examine the distribution of the first digits of these prices. Historical electricity price data from Germany, obtained from publicly available sources, were used for the analysis. We applied Benford’s Law to determine the frequency of occurrence of the first digits of electricity prices and compared the results with the expected distribution according to Benford’s Law. We also considered the impact of negative electricity prices. The results suggest that external factors, such as geopolitical events and climatic conditions, have a significant impact on the volatility of electricity prices. Benford’s Law can be a useful tool for analyzing electricity prices, although its application to this market shows certain deviations.

Keywords: electricity price volatility; Benford’s Law; geopolitical factors; climatic conditions; electricity price prediction; Germany (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: 2024
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