Journal
ENERGY & ENVIRONMENT
Volume 27, Issue 1, Pages 105-121Publisher
SAGE PUBLICATIONS LTD
DOI: 10.1177/0958305X16638574
Keywords
Merit-order effect; market value of renewable electricity; European electricity markets; variable renewables
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Funding
- European Commission
- IEE Project DIA CORE
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This study presents an assessment of both the merit-order effect and the market values of electricity generated from variable renewable energy sources, namely wind and solar photovoltaics. The historical price development in several European countries - that cover 73% of the renewable energy source share in Europe's regional electricity markets - has been taken into account. To gain insights into the impact of renewable electricity on prices, market values and the merit-order effect were calculated using a multivariate regression analysis and ex-post calculations. All the countries analyzed show a consistent, negative impact of renewable electricity on electricity spot market prices and a decreasing market value of renewable energy source, possibly attributable to increased shares. The coefficients are economically and statistically significant. This study provides insights into a large geographical spread of European electricity markets, enables a comparison between countries, and therefore has valuable implications for policy makers.
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