Reaching New Lows? The Pandemic’s Consequences for Electricity Markets

David Benatia and Samuel Gingras

The Energy Journal, 2023, vol. 44, issue 4, 195-221

Abstract: The COVID-19 crisis has disrupted electricity systems worldwide. This article disentangles the effects of the demand reductions, fuel price devaluation, and increased forecast errors on New York’s day-ahead and real-time markets by combining machine learning and structural econometrics. From March 2020 to February 2021, statewide demand has decreased by 4.6 TWh (-3%) including 4 TWh (-8%) for New York City alone, and the day-ahead market has depreciated by $250 million (-6%). The real-time market has, however, appreciated by $15 million (+23%) because of abnormally large forecast errors which significantly undermined system efficiency.

Keywords: COVID-19; Demand reductions; Balancing costs; Forecast errors (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:sae:enejou:v:44:y:2023:i:4:p:195-221

DOI: 10.5547/01956574.44.4.dben

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