Photovoltaic and wind power feed-in impact on electricity prices: The case of Germany. (August 2018)

• Record Type: Journal Article
• Authors: Benhmad, François; Percebois, Jacques
• Is Part Of: Energy policy. Volume 119(2018)
• Page Start: 317
• Page End: 326
• Publication Date: 2018-08
• Subjects: Q41 -- Q42 -- Q48; RES -- Wind power -- Photovoltaic -- Electricity spot prices -- Merit order effect; Energy policy -- Periodicals; Politique énergétique -- Périodiques; Electronic journals; 333.79
• DOI: 10.1016/j.enpol.2018.04.042
• Languages: English
• ISSNs: 0301-4215

Abstract

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. Highlights: Wind feed-in and Solar photovoltaic power decrease electricity spot prices. The wind impact has in average the same magnitude during 24 h of the day. The PV impact reaches its maximum level at the middle of the day. PV generation displaces peak-load plants mainly gas-fired power plants.