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Ring the Alarm! Electricity Markets, Renewables, and the Pandemic

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  • David BENATIA

    (CREST (UMR 9194), ENSAE, Institut Polytechnique de Paris)

Abstract

The pandemic's impacts on European electricity markets have been enormous, especially in countries with abundant near-zero marginal cost of production like France. This article provides an in-depth quantitative study of the impacts of the crisis on the French electricity sector. During the lockdown episode, France has experienced unparalleled demand reductions (-12%) and energy price falls (-40%) resulting in revenue losses of 1.2 billion € (-45%) for market participants. This paper argues that the observed market outcomes during the crisis are somehow indicative of outcomes in a future with abundant renewable power, where prices will fall in a more sustainable way.

Suggested Citation

  • David BENATIA, 2020. "Ring the Alarm! Electricity Markets, Renewables, and the Pandemic," Working Papers 2020-22, Center for Research in Economics and Statistics, revised 09 Nov 2020.
    • Handle: RePEc:crs:wpaper:2020-22
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    Cited by:

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    2. David BENATIA & Etienne BILLETTE de VILLEMEUR, 2019. "Strategic Reneging in Sequential Imperfect Markets," Working Papers 2019-19, Center for Research in Economics and Statistics.
    3. Arkadiusz Kampczyk & Wojciech Gamon & Katarzyna Gawlak, 2023. "Integration of Traction Electricity Consumption Determinants with Route Geometry and Vehicle Characteristics," Energies, MDPI, vol. 16(6), pages 1-23, March.
    4. Graf, Christoph & Quaglia, Federico & Wolak, Frank A., 2021. "(Machine) learning from the COVID-19 lockdown about electricity market performance with a large share of renewables," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    5. Pizarro-Irizar, Cristina, 2023. "Is it all about supply? Demand-side effects on the Spanish electricity market following Covid-19 lockdown policies," Utilities Policy, Elsevier, vol. 80(C).
    6. Fabra, Natalia, 2021. "The energy transition: An industrial economics perspective," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    7. Marcin Malec & Grzegorz Kinelski & Marzena Czarnecka, 2021. "The Impact of COVID-19 on Electricity Demand Profiles: A Case Study of Selected Business Clients in Poland," Energies, MDPI, vol. 14(17), pages 1-17, August.
    8. Rahat, Birjees & Nguyen, Pascal, 2022. "Risk-adjusted investment performance of green and black portfolios and impact of toxic divestments in emerging markets," Energy Economics, Elsevier, vol. 116(C).

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    More about this item

    Keywords

    Energy Transition; COVID-19; Demand; Electricity Markets;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q02 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Commodity Market
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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