Abstract
During the last 5 years European wholesale electricity markets have been confronted with a rapid increase in Renewable Energy Source (RES)-generation. RES-generation is characterized by (1) more decentralized production at typically dissimilar locations compared to traditional production and (2) more intermittent patterns of production depending on weather conditions. This chapter will focus on solar and wind energy, which have in common that they cannot be ordered to our disposal when we need them. However, the share of these renewables in the total energy supply in Germany has increased to such levels that the electricity prices on the day ahead spot market depend highly on the expected supply of solar and wind energy. In addition, regulations in favor of RES-generation in Germany have forced the Transmission System Operators (TSOs) to use all generated solar and wind energy. On windy and sunny days this has led to some exceptional cases of negative energy prices. This chapter identifies the influence of solar and wind energy supply on day ahead electricity prices.
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Notes
- 1.
In Chap. 6, Kolb gives an analysis of the gas market.
- 2.
In the first CEVI books Financial Aspects in Energy and the second CEVI book, Energy Economics and Financial Markets, attention was paid to this topic by Dorsman, van Montfort and Pottuijt (2011) and Dorsman, Franx and Pottuijt (2011) respectively.
- 3.
For example, President Francois Hollande of France said in July 2013 that due to possible pollution effects, he will not allow any research on the possibility of producing shale gas in France during his presidency.
- 4.
Transition away from fossil fuels driven by a desire for lower dependencies on foreign fossil fuel suppliers, increased usage of renewable energy sources, concerns with climate change and the depletion of fossil fuels.
- 5.
We thank Mr. Khou, Powernext, for providing us is with the data necessary for this research.
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Acknowledgments
The authors thank the attendants of the fourth CEVI conference in May 2013 in Chicago and especially the discussant of the paper, Hillary Till, for their comments.
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Adaduldah, N., Dorsman, A., Franx, G.J., Pottuijt, P. (2014). The Influence of Renewables on the German Day Ahead Electricity Prices. In: Dorsman, A., Gök, T., Karan, M. (eds) Perspectives on Energy Risk. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-41596-8_10
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DOI: https://doi.org/10.1007/978-3-642-41596-8_10
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