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Handbook of Power Systems II pp 189–212Cite as

Modelling the Structure of Long-Term Electricity Forward Prices at Nord Pool

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Abstract

This chapter models long-term electricity forward prices with variables that influence the price of electricity. Long-term modelling requires consideration of expected changes in the demand and supply structure. The model combines high-resolution information on fuel costs from financial markets and low-resolution information on the demand/supply structure of the electricity market. We model the latter using consumption and supply capacity and the former with forward prices of fuels, emission allowances and imported electricity. The model is estimated using data from the Nordic electricity market and global long-term forward prices of energy. Owing to a lack of data on consumption and supply capacity, the estimated results provide only the broad influence of these variables on forward prices. Though extrapolation of the prices observed in Nord Pool may suffer from the influence of short-term variables, such as precipitation and temperature, the model yields robust forecasts of the prices of contracts that are not exchange traded.

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Author information

Authors and Affiliations

  1. Faculty of Electrical Engineering, University of Ljubljana, Tržaška 25, SI-1000, Ljubljana, Slovenia

    Martin Povh

Authors
  1. Martin Povh
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  2. Robert Golob
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  3. Stein-Erik Fleten
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Corresponding author

Correspondence to Martin Povh .

Editor information

Editors and Affiliations

  1. , Division of Economics and Business, Colorado School of Mines, 15th Street 816, Golden, 80401, Colorado, USA

    Steffen Rebennack

  2. Dept. Industrial & Systems, Engineering, University of Florida, Weil Hall 303, Gainesville, 32611-6595, Florida, USA

    Panos M. Pardalos

  3. Rio Praia de Botafogo, Centro Empresarial, -A-Botafogo 2281701, Rio de Janeiro, 22250-040, Rio de Janeiro, Brazil

    Mario V. F. Pereira

  4. Research & Development, EnerCoRD - Energy Consulting,, Plastira Street 4, Athens, 171 21, Greece

    Niko A. Iliadis

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© 2010 Springer-Verlag Berlin Heidelberg

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Povh, M., Golob, R., Fleten, SE. (2010). Modelling the Structure of Long-Term Electricity Forward Prices at Nord Pool. In: Rebennack, S., Pardalos, P., Pereira, M., Iliadis, N. (eds) Handbook of Power Systems II. Energy Systems. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-12686-4_7

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  • DOI: https://doi.org/10.1007/978-3-642-12686-4_7

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-642-12685-7

  • Online ISBN: 978-3-642-12686-4

  • eBook Packages: EngineeringEngineering (R0)

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