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Reaching New Lows? The Pandemic’s Consequences for Electricity Markets

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  • David Benatia
  • Samuel Gingras

Abstract

The COVID-19 crisis has disrupted electricity systems worldwide. This article disentangles the effects of the demand reductions, fuel price devaluation, and increased forecast errors on New York’s day-ahead and real-time markets by combining machine learning and structural econometrics. From March 2020 to February 2021, statewide demand has decreased by 4.6 TWh (-3%) including 4 TWh (-8%) for New York City alone, and the day-ahead market has depreciated by $250 million (-6%). The real-time market has, however, appreciated by $15 million (+23%) because of abnormally large forecast errors which significantly undermined system efficiency.

Suggested Citation

  • David Benatia & Samuel Gingras, 2023. "Reaching New Lows? The Pandemic’s Consequences for Electricity Markets," The Energy Journal, , vol. 44(4), pages 195-221, July.
    • Handle: RePEc:sae:enejou:v:44:y:2023:i:4:p:195-221
    DOI: 10.5547/01956574.44.4.dben
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    References listed on IDEAS

    as
    1. Mar Reguant, 2014. "Complementary Bidding Mechanisms and Startup Costs in Electricity Markets," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(4), pages 1708-1742.
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