The Renewables Influence on Market Splitting: the Iberian Spot Electricity Market

Nuno Carvalho Figueiredo, Patrícia Pereira da Silva and Pedro Cerqueira
Additional contact information
Nuno Carvalho Figueiredo: EFS Initiative, University of Coimbra, Sustainable Energy Systems – MIT-P, Coimbra, Portugal and INESC Coimbra, Portugal
Patrícia Pereira da Silva: Faculty of Economics, University of Coimbra and INESC Coimbra, Portugal

No 2014-14, GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra

Abstract: This paper aims to assess the influence of wind power generation on the market splitting behaviour of the Iberian electricity spot markets. We use logit models to express the probability response for market splitting of day-ahead spot electricity prices together with explanatory variables like, wind speed, available transmission capacity and electricity demand. The results show that the probability of market splitting increases with the increase of wind power generation. The European interconnection capacity target of 10% of the peak demand of the smallest interconnected market has to be reconsidered, in order to keep electricity market integration a reality. As demonstrated, investment in interconnection capacity has to follow the investment and deployment of further wind power capacity, so coordination policies governing both interconnection development and renewable incentives should be designed.

Keywords: Electricity Market Integration; Market Splitting; Renewable Energy. (search for similar items in EconPapers)
JEL-codes: C10 C35 D47 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2014-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in Energy Policy 85:218-234, 2015.

Downloads: (external link)
https://repec.uc.pt/gmf/wpaper/wpgemf/gemf_2014-14.pdf (application/pdf)

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:gmf:wpaper:2014-14

Access Statistics for this paper

More papers in GEMF Working Papers from GEMF, Faculty of Economics, University of Coimbra Contact information at EDIRC.
Bibliographic data for series maintained by Sofia Antunes ().