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An ex-post analysis of the effect of renewables and cogeneration on Spanish electricity prices

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Author Info

  • Gelabert, Liliana
  • Labandeira, Xavier
  • Linares, Pedro

Abstract

Growing concerns about climate change and energy dependence are driving specific policies to support renewable or more efficient energy sources such as cogeneration in many regions, particularly in the production of electricity. These policies have a non-negligible cost, and therefore a careful assessment of their impacts seems necessary. In particular, one of the most-debated impacts is their effect on electricity prices, for which there have been some ex-ante studies, but few ex-post studies. This article presents a full ex-post empirical analysis, by looking at use of technologies and hourly electricity prices for 2005–2009 in Spain, to study the effects that the introduction of renewable electricity and cogeneration has had on wholesale electricity prices. It is particularly interesting to perform this study in Spain where an active system of public support to renewables and cogeneration has led to a considerable expansion of these energy sources and electricity pricing is at the center of intense debate. The paper reports that a marginal increase of 1GWh of electricity production using renewables and cogeneration is associated with a reduction of almost 2€ per MWh in electricity prices (around 4% of the average price for the analyzed period).

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Bibliographic Info

Article provided by Elsevier in its journal Energy Economics.

Volume (Year): 33 (2011)
Issue (Month): S1 ()
Pages: S59-S65

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Handle: RePEc:eee:eneeco:v:33:y:2011:i:s1:p:s59-s65

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Web page: http://www.elsevier.com/locate/eneco

Related research

Keywords: Prices; Renewables; Cogeneration; Electricity; Supply; Spain;

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Cited by:
  1. Schmidt, J. & Lehecka, G. & Gass, V. & Schmid, E., 2013. "Where the wind blows: Assessing the effect of fixed and premium based feed-in tariffs on the spatial diversification of wind turbines," Energy Economics, Elsevier, vol. 40(C), pages 269-276.
  2. Dirk Rübbelke & Stefan Vögele, 2012. "Effects of Carbon Dioxide Capture and Storage in Germany on European Electricity Exchange and Welfare," Working Papers 2012-05, BC3.
  3. Tim Nelson & Paul Simshauser & James Nelson, 2012. "Queensland solar feed-in tariffs and the merit-order effect: economic benefit, or regressive taxation and wealth transfers?," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 42(3), pages 277-301, December.
  4. Johanna Cludiud & Sam Forrest & Iain MacGill, 2013. "Distributional Effects of the Australian Renewable Energy Target (RET) through Wholesale and Retail Electricity Price Impacts," Discussion Papers 2013-33, School of Economics, The University of New South Wales.
  5. A. Denny Ellerman, 2014. "The Implicit Carbon Price of Renewable Energy. Incentives in Germany," EUI-RSCAS Working Papers p0376, European University Institute (EUI), Robert Schuman Centre of Advanced Studies (RSCAS).
  6. Böckers, Veit & Giessing, Leonie & Rösch, Jürgen, 2013. "The green game changer: An empirical assessment of the effects of wind and solar power on the merit order," DICE Discussion Papers 104, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  7. Würzburg, Klaas & Labandeira, Xavier & Linares, Pedro, 2013. "Renewable generation and electricity prices: Taking stock and new evidence for Germany and Austria," Energy Economics, Elsevier, vol. 40(S1), pages S159-S171.
  8. Elberg, Christina & Hagspiel, Simeon, 2013. "Spatial Dependencies of Wind Power and Interrelations with Spot Price Dynamics," EWI Working Papers 2013-11, Energiewirtschaftliches Institut an der Universitaet zu Koeln.
  9. Stefano Cló & Gaetano D’Adamo, 2014. "The Impact of Solar Penetration on Solar and Gas Market Value: an application to the Italian Power Market," Working Papers 1405, Department of Applied Economics II, Universidad de Valencia.

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