Authors
D Thomas P. Tangerås and Frank A. WolakAbstract
Renewable energy sources (RES) play an important role in the effort to decarbonize the energy system. Despite discussions of their zero marginal cost in reducing electricity prices, there is a gap in understanding the uncerta inty associa ted with forecast errors in renewable energy generation in the intra-day market. Using a fixed-effect regression, this study explores how uncertainties in wind and solar generation affect prices in France from 2015 to 2018. It also examines variations in residual demand and corresponding price changes. The results show that wind uncertainty and solar intermittency have a greater impact on prices than their generation forecasts. The study reveals that the electricity price stability depends on the shape of the merit order curve, the use of interconnections and the conventional generation.
