Negative Price Spikes at Power Markets: The Role of Energy Policy

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in

Market premia for renewables in Germany: The effect on electricity prices

“…The effect of green electricity generation on electricity prices has been typically estimated on the basis of time series models -see, for instance, Fanone et al (2013);Gerster (2016); Ketterer (2014); de Lagarde and Lantz (2018); Paschen (2016). This approach necessitates the specification of a functional form that models the relationship between prices and key variables, such as hour of the day, as well as a set of covariates.…”

“…Another advantage is that, owing to the high flexibility of the model, predictions from BART models are highly precise -see for instance the empirical examples provided by Hill (2011), as well as our own results presented below. Not least, rather than estimating numerous separate models, for instance for each hour of a day individually, for both peak-and off-peak hours (see e. g. Gerster, 2016), a single BART model suffices for our analysis.…”

“…Gerster (2016), for instance, demonstrates that the growing feed-in of green electricity raises the probability of negative price spikes and thus threatens the financial viability of conventional plants. Negative prices primarily arise because conventional power plants face substantial ramp-up costs (Gerster, 2016) and, hence, are most often not shut down despite negative revenues due to negative prices. Not least, numerous studies argue that there is a negative link between green electricity generation and the wholesale price, commonly referred to as the merit-order effect (Cludius et al, 2014;de Lagarde and Lantz, 2018;Paschen, 2016;Praktiknjo and Erdmann, 2016;Würzburg et al, 2013).…”

Large fluctuations in locational marginal prices

“…Moreover, by setting α − = LMP ( μ ξ ) − β − and α + = LMP ( μ ξ ) + β + , β−,β+∈double-struckRm,+ and β − ≠ β + , we can weigh differently negative and positive deviations from the nominal values. We remark that negative price spikes are also of interest [31,32] and can be covered in our framework, by choosing the threshold vectors α − , α + accordingly. Finally, we can study price spikes at a more granular level by restricting the union in equation (2.10) to a particular subset of nodes N~⊆N.…”

Farm‐scale bio‐power‐to‐methane: Comparative analyses of economic and environmental feasibility

“…When electricity demand does not synchronise well with electricity production then networks, markets and security of supply may be at stake. In Germany, this unbalance has already resulted in negative electricity prices . The growth of renewable but intermittent energy sources will increase the need for larger, more flexible and more diversified storage possibilities for electricity.…”