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The dependence of quantile power prices on supply from renewables

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  • Huisman, Ronald
  • Stet, Cristian

Abstract

Understanding power prices dynamics is crucial for valuing flexibility assets such as storage or flexible consumption facilities that accommodate fluctuations in power supply from variable renewables. Owners of such assets need to know how extreme power prices can become in order to optimally manage (dis)charging or adjusting consumption volumes. We examine how to predict those high and low prices, being the different quantiles of the power price probability distribution function, and question how supply from variable renewable sources affect different quantile prices.

Suggested Citation

  • Huisman, Ronald & Stet, Cristian, 2022. "The dependence of quantile power prices on supply from renewables," Energy Economics, Elsevier, vol. 105(C).
    • Handle: RePEc:eee:eneeco:v:105:y:2022:i:c:s0140988321005351
    DOI: 10.1016/j.eneco.2021.105685
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    References listed on IDEAS

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    3. Koolen, Derck & Huisman, Ronald & Ketter, Wolfgang, 2022. "Decision strategies in sequential power markets with renewable energy," Energy Policy, Elsevier, vol. 167(C).

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    More about this item

    Keywords

    Power market flexibility; Supply from variable renewable sources; Extreme power prices; Panel quantile regression;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting
    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation

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