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On the Impact of Wind Feed-in and Interconnections on Electricity Price in Germany

Author

Listed:
  • François Benhmad

    (MRE - Montpellier Recherche en Economie - UM - Université de Montpellier)

  • Jacques Percebois

    (UMR ART-Dev - Acteurs, Ressources et Territoires dans le Développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - UPVM - Université Paul-Valéry - Montpellier 3 - UPVD - Université de Perpignan Via Domitia - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we explore carry out an empirical analysis for Germany, as a country with high penetration of wind energy, to investigate the interaction between the well-known merit-order effect, i.e., falling spot price levels as well as highly fluctuating spot prices and the European electricity grids inteconnections,i.e., market coupling. Our main empirical findings suggest that wind power in-feed decreases electricity spot price level but increases spot prices volatility. Furthermore, the relationship between wind power and spot electricity prices can be strongly impacted by European electricity grids interconnection which behaves like a safety valve lowering volatility and limiting the price decrease. Therefore, the impacts of wind generated electricity on electricity spot markets are less clearly pronounced in interconnected systems.

Suggested Citation

  • François Benhmad & Jacques Percebois, 2017. "On the Impact of Wind Feed-in and Interconnections on Electricity Price in Germany," Post-Print hal-01837122, HAL.
    • Handle: RePEc:hal:journl:hal-01837122
    DOI: 10.15173/esr.v23i1.3311
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    Cited by:

    1. Loisel, Rodica & Lemiale, Lionel & Mima, Silvana & Bidaud, Adrien, 2022. "Strategies for short-term intermittency in long-term prospective scenarios in the French power system," Energy Policy, Elsevier, vol. 169(C).

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