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The Effect of Intermittent Renewable Energy Generation on Electricity Prices: A Literature Survey

Author

Listed:
  • Blandina C. R. Oliveira

    (Polytechnic of Leiria, School of Technology and Management CEFAGE-UE)

  • Adelino Fortunato

    (University of Coimbra, CeBER, Faculty of Economics)

Abstract

Despite increasing deployment of intermittent renewable energies at lower generation costs, wholesale electricity price has been falling while retail electricity prices go up. This has triggered the debate on the cost-effectiveness of this source of energy. Therefore, the aim of this paper is to present a literature survey on the effect of intermittent renewable energy generation on electricity prices. Researches have used different methodological approaches, different periods and countries to examine the impacts of intermittent renewable energy on electricity prices. Most of the studies found evidence of the merit-order effect, which means that an increase in intermittent source generation would reduce the spot electricity market price. Finally, the few studies that address the retail market found that retail electricity could either increase or decrease.

Suggested Citation

  • Blandina C. R. Oliveira & Adelino Fortunato, 2021. "The Effect of Intermittent Renewable Energy Generation on Electricity Prices: A Literature Survey," Notas Económicas, Faculty of Economics, University of Coimbra, issue 53, pages 73-83, December.
    • Handle: RePEc:gmf:journl:y:2021:i:53:p:73:83
    DOI: 10.14195/2183-203X_53_5
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    References listed on IDEAS

    as
    1. World Bank Group, 2017. "Joining Forces for Better Services," World Bank Publications - Reports 28095, The World Bank Group.
    2. Abbott, Malcolm & Cohen, Bruce, 2009. "Productivity and efficiency in the water industry," Utilities Policy, Elsevier, vol. 17(3-4), pages 233-244, September.
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    More about this item

    Keywords

    Electricity market; intermittent renewable energy; electricity prices.;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms

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