Assessing the impact of renewable energy sources on the electricity price level and variability - a Quantile Regression approach

Katarzyna Maciejowska ()

No HSC/19/02, HSC Research Reports from Hugo Steinhaus Center, Wroclaw University of Science and Technology

Abstract: The literature on renewable energy sources indicates that an increase of the intermittent wind and solar generation affects significantly the distribution of electricity prices. In this article, the influence of two types of renewable energy sources (wind and solar photo voltaic) on the level and variability of German electricity spot prices is analyzed. The quantile regression models are built to estimate the merit order effect for different quantiles of electricity prices. The results indicate that both types of renewable generations have a similar, negative impact on the price level, approximated by the price median. When the price volatility, measured by the inter-quantile range (IQR), is considered, the outcomes show that wind and solar influence prices differently. Conditional on the level of the total demand, the wind generation would either increase (when the demand is low) or decrease (when the demand is high) the IQR. Meanwhile, the increase of solar power stabilizes the price variance for moderate demand level. Thus, policy supporting the development and integration of RES should search for a balance between the wind and solar power.

Keywords: Electricity prices; Quantile regression; Merit order effect; Price variability (search for similar items in EconPapers)
JEL-codes: C22 C32 C51 Q41 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2019-07-11
New Economics Papers: this item is included in nep-ene and nep-reg
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http://www.im.pwr.wroc.pl/~hugo/RePEc/wuu/wpaper/HSC_19_02.pdf Original version, 2019 (application/pdf)

Related works:
Journal Article: Assessing the impact of renewable energy sources on the electricity price level and variability – A quantile regression approach (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:wuu:wpaper:hsc1902

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