Upon discussion of price setting on electricity wholesale markets, many refer to the so-called merit order model. Conventional belief holds that during most hours of the year, coal- or natural gas-fired power plants set the price on European markets. In this context, this paper analyses price setting on European power markets. We use a fundamental…
Tag: Merit Order
The Impact of Intermittent Power Generation on the Wholesale Electricity Prices of the MIBEL Iberian Market
This study addresses the effect of intermittent renewable energy generation on the dynamics of electricity prices of the Iberian market (Spain and Portugal) during the period 2010-2015. The results indicate that intermittent renewable energy has a material negative effect on electricity price, consistent with the presence of a merit-order effect. Still, that effect varies with…