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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

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    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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