The effect of intermittent renewables on the electricity price variance

Simple item page
dc.contributor.authorWOZABAL, David
dc.contributor.authorGRAF, Christoph
dc.contributor.authorHIRSCHMANN, David
dc.date.accessioned2016-02-24T13:20:57Z
dc.date.available2016-02-24T13:20:57Z
dc.date.issued2016
dc.descriptionFirst online: 07 March 2015en
dc.description.abstractThe dominating view in the literature is that renewable electricity production increases the price variance on spot markets for electricity. In this paper, we critically review this hypothesis. Using a static market model, we identify the variance of the infeed from intermittent electricity sources (IES) and the shape of the industry supply curve as two pivotal factors influencing the electricity price variance. The model predicts that the overall effect of IES infeed depends on the produced amount: while small to moderate quantities of IES tend to decrease the price variance, large quantities have the opposite effect. In the second part of the paper, we test these predictions using data from Germany, where investments in IES have been massive in the recent years. The results of this econometric analysis largely conform to the predictions from the theoretical model. Our findings suggest that subsidy schemes for IES capacities should be complemented by policy measures supporting variance absorbing technologies such as smart-grids, energy storage, or grid interconnections to ensure the build-up of sufficient capacities in time.en
dc.format.mimetypeapplication/pdf
dc.identifier.citationOR spectrum, 2016, Vol. 38, No. 3, pp. 687–709en
dc.identifier.doi10.1007/s00291-015-0395-x
dc.identifier.endpage709
dc.identifier.issn0171-6468
dc.identifier.issn1436-6304
dc.identifier.issue3
dc.identifier.startpage687
dc.identifier.urihttps://hdl.handle.net/1814/39145
dc.identifier.volume38
dc.language.isoenen
dc.publisherSpringeren
dc.relation.ispartofOR spectrumen
dc.relation.ispartofOR spectrum
dc.relation.ispartofseries[Florence School of Regulation]en
dc.relation.ispartofseries[Energy]en
dc.rightsinfo:eu-repo/semantics/openAccess
dc.titleThe effect of intermittent renewables on the electricity price varianceen
dc.typeArticleen
dspace.entity.typePublication
eui.subscribe.skiptrue
Files
Original bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
The effect of intermittent renewables on the electricity price variance.pdf
Size:
482.62 KB
Format:
Adobe Portable Document Format
Description:
Full-text in Open Access, Post-print version
Download
License bundle
Now showing 1 - 1 of 1
Thumbnail Image
Name:
license.txt
Size:
3.83 KB
Format:
Item-specific license agreed upon to submission
Description:
Download
Collections
RSC Articles