Analyzing the dynamic impact of electricity futures on revenue and risk of renewable energy in China

Zhang, Yue; Farnoosh, Arash

doi:10.1016/j.enpol.2019.06.011

Cited by 15 publications

(7 citation statements)

References 45 publications

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“…According to the prospect theory, renewable energy investors would give more weight to potential losses than to potential gains and thus demand a substantial risk premium to offset the increased risk (Salm, 2018). In addition, the expectation theory holds that a risk premium is used to compensate for the uncertainty of the future energy prices caused by the imperfect storability of this energy (Zhang and Farnoosh, 2019). Moreover, Koolen et al (2021) found that renewable energy technology oppositely affects the risk premium due to the heterogenous influence on risk-related hedging pressures of retailers and producers.…”

Section: Resultsmentioning

confidence: 99%

“…Krecar and Gubina (2019) stated that, renewable energy increases market risk, influencing the trading and volatility. Finally, the relationship between financial markets and policy risks is an increasingly important factor for investors in this sector, since the effects of structural modifications, market reforms and new tools to address risk and return issues are essential to investors (Zhang and Farnoosh, 2019).…”

Section: Resultsmentioning

confidence: 99%

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Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Clemente-Almendros

Boldeanu

Seguí-Amórtegui

2021

JES

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PurposeThe authors analyze the impact of COVID-19 on listed European electricity companies and differentiate between renewable and traditional electricity, to show the heterogenous characteristics of electricity subsectors and the differences between renewable and traditional electricity.Design/methodology/approachUsing the event study method, the authors calculate the cumulative average abnormal returns (ARs) before and after the World Health Organization pandemic announcement and the declaration of national lockdowns in Europe.FindingsThe results show that while the European electricity sector was overall negatively impacted by the COVID-19 announcement, this impact was larger for renewable companies due to their riskier investment profile. Moreover, after the national lockdowns came into effect, the recovery in the financial markets return was smaller for the latter.Research limitations/implicationsThere may be variables to be included in the model to analyze possible differences between companies and countries, as well as alternative econometric models. Limited to the data, the authors did not investigate the different impact of the economic policy uncertainty from various countries inside or outside the EU.Practical implicationsThe results have important implications for both investors and policymakers since the heterogenous characteristics of electricity subsectors. This heterogeneity prompts different investor reactions, which are necessary to know and to understand.Originality/valueAs far as the authors know, this is the first study that analyses the effect of COVID-19 in heterogeneity profile of both types of electricity, renewable and traditional.

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Section: Resultsmentioning

confidence: 99%

Section: Resultsmentioning

confidence: 99%

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Clemente-Almendros

Boldeanu

Seguí-Amórtegui

2021

JES

View full text Add to dashboard Cite

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“…The literature is rich with discussions of many of these terms. The studies of [154][155][156][157] have investigated the future development trends of the electric selling firms and the possible behavior of the participants of the green certificate trading market. In particular, they examined the effects of green certificate storage, prices and behavior of market participants in the green certificate trading market.…”

Section: Economic Impact On Flexibility Improvementmentioning

confidence: 99%

A Review of Improvements in Power System Flexibility: Implementation, Operation and Economics

et al. 2022

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This study presents a literature review on the concept of power system flexibility in terms of its definition, indices, algorithms, implementation, economic impacts, operational impacts, and security. Although there are tremendous reviews on this subject in the literature, each paper discusses specific aspects of flexibility. Moreover, the literature is devoid of a comprehensive review of the latest improvements in terms of implementation, operation, and economics, which are addressed by the collections presented in this study. This paper, therefore, surveys some improvements that have been made in recent decades. Furthermore, we highlight the impact of the high penetration of renewable energy and energy storage systems towards enhancing the improvement of power system flexibility.

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“…Developed on the basis of electricity forward contract transactions, the power futures contracts are highly standardized during power futures trading (Spodniak and Bertsch, 2020). An advanced power futures market always has comprehensive functions of price discovery, resource allocation optimization, and risk aversion (Matthäus, 2010;Kalantzis and Milonas, 2013), and thus, it will guarantee China's energy transition in terms of energy structure optimization and market risk control (Zhang and Farnoosh, 2019).…”

Section: Power Futures Marketmentioning

confidence: 99%

How to Promote Energy Transition With Market Design: A Review on China’s Electric Power Sector

2021

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Energy transition, especially in the power industry, will lead to a significant promotion in energy sustainable development. Lots of emphases have been focused on the impact of policy on the energy transition; however, there were little studies on the role of the market. This paper will be devoted to the theoretical basis of market design comprehensively and discusses the obstacles restricting China’s energy transition by using an Institution-Economics-Technology-Behavior (IETB) analysis framework (four dimensions including Institution, Economics, Technology, and Behavior). In addition, the paper provides an overview of research findings on some available market designs related to the energy transition. Of note, power spot market, power capacity market, power futures market, carbon emission market, and Tradable Green Certificate (TGC) market are highlighted and discussed with emphasis. And the effects of implementing each market on overcoming those obstacles in the energy transition process are analyzed. The review results show that the market design is as important as the policy-making; hence, it is unwise for energy transition to focus on policies and ignore markets, and the market design should be pertinent and objective. Finally, some policy recommendations and market design suggestions are put forward.

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Analyzing the dynamic impact of electricity futures on revenue and risk of renewable energy in China

Cited by 15 publications

References 45 publications

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

Impact of COVID-19 on listed European electricity companies: a comparative analysis of investment in renewable and traditional electricity

A Review of Improvements in Power System Flexibility: Implementation, Operation and Economics

How to Promote Energy Transition With Market Design: A Review on China’s Electric Power Sector

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