Photovoltaic and wind power feed-in impact on electricity prices: The case of Germany

François Benhmad and Jacques Percebois
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François Benhmad: MRE - Montpellier Recherche en Economie - UM - Université de Montpellier
Jacques Percebois: UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique

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Abstract: The aim of the paper is to quantify the impact of increasing renewable energy sources (RES), especially wind generation and photovoltaic feed-in, on electricity prices in Germany, with a view to investigating the well-known merit order effect. To explore the dynamics of the merit order effect at an hourly resolution, we use the SURE methodology for carrying out an empirical analysis based on hourly historical data for the Germany electricity market between 2012 and 2015. Our main empirical findings confirm that increasing the share of wind generation and photovoltaic feed-in induces a sharp fall in electricity spot prices. Moreover, this impact varies throughout the 24 h of the day due to the dynamics of electricity demand and the intermittency of wind and solar photovoltaic feed-in.

Keywords: RES; Wind power; Photovoltaic electricity; Spot prices; Merit order effect (search for similar items in EconPapers)
Date: 2018-08
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Citations: View citations in EconPapers (25)

Published in Energy Policy, 2018, 119, pp.317 - 326. ⟨10.1016/j.enpol.2018.04.042⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-01830537

DOI: 10.1016/j.enpol.2018.04.042

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