The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany
The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of the year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bode, Sven & Groscurth, Helmuth-Michael, 2006. "Zur Wirkung des EEG auf den "Strompreis"," HWWA Discussion Papers 348, Hamburg Institute of International Economics (HWWA).
- Rathmann, M., 2007. "Do support systems for RES-E reduce EU-ETS-driven electricity prices?," Energy Policy, Elsevier, vol. 35(1), pages 342-349, January.
- Burtraw, Dallas & Palmer, Karen, 2005.
"Cost-Effectiveness of Renewable Electricity Policies,"
dp-05-01, Resources For the Future.
- Palmer, Karen & Burtraw, Dallas, 2005. "Cost-effectiveness of renewable electricity policies," Energy Economics, Elsevier, vol. 27(6), pages 873-894, November.
- Bode, Sven, 2006. "On the impact of renewable energy support schemes on power prices," HWWI Research Papers 4-7, Hamburg Institute of International Economics (HWWI).
- Wustenhagen, Rolf & Bilharz, Michael, 2006. "Green energy market development in Germany: effective public policy and emerging customer demand," Energy Policy, Elsevier, vol. 34(13), pages 1681-1696, September.
- Wissen, Ralf & Nicolosi, Marco, 2007. "Anmerkungen zur aktuellen Diskussion zum Merit-Order Effekt der erneuerbaren Energien," EWI Working Papers 2007-3, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:36:y:2008:i:8:p:3076-3084. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.