Impact of variable renewable production on electricity prices in germany: a markov switching model

Authors

Cyril Martin de Lagarde, Frédéric Lantz

Abstract

This paper aims at assessing the impact of renewable energy sources (RES) production on electricity spot prices. To do so, we use a two-regime Markov Switching (MS) model, that enables to disentangle the so-called “merit-order effect” due to wind and solar photovoltaic productions (used in relative share of the electricity demand), depending on the price being high or low…