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Integration of non-conventional renewable energy and spot price of electricity: A counterfactual analysis for Colombia

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  • Perez, Alex
  • Garcia-Rendon, John J.

Abstract

Energy transition is prevalent nowadays, and Colombia is no exception to this phenomenon. Energy coming from non-conventional renewable resources is one of the main feature of this phenomenon. Consequently, this paper evaluates the impact of this new kind of renewable energy resource in the Colombian wholesale electricity market. This evaluation uses a counterfactual scenario based on a structural model of an energy firm’s behavior that offers 1000 MW in 2018. Our results suggest that the spot price decreases on average 12.75 COP$/kWh (4.31 US$/MWh) per day. We find that 6.75 COP$/kWh (2.28 US$/MWh) is due to the firms’ strategies, and 6 COP$/kWh (2.03 US$/MWh) is a merit order effect.

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  • Perez, Alex & Garcia-Rendon, John J., 2021. "Integration of non-conventional renewable energy and spot price of electricity: A counterfactual analysis for Colombia," Renewable Energy, Elsevier, vol. 167(C), pages 146-161.
    • Handle: RePEc:eee:renene:v:167:y:2021:i:c:p:146-161
    DOI: 10.1016/j.renene.2020.11.067
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    More about this item

    Keywords

    Non-conventional renewable energies; Spot price of electricity; Electricity wholesale market;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis

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