Quantative Analysis of the Merit Order Effect from Photovoltaic Production in Key European Countries & Effect of Market Coupling
(Room G107)
09 Jun 15
2:00 PM
-
3:30 PM
Tracks:
Theme: Europe's Transitioning Power Sector, Theme: Renewable Energy Strategy, Business & Integration
ABSTRACT:
This study builds on a 2013 paper from M. Gourvitch, M. Gouzerh, M. Carton and M. Masson on “Quantitative analysis of the merit order effect from photovoltaic production in ITALY“. It proposes to use the method developed in that paper to quantify the savings incurred by the end consumers in s over the past 7 years as a result of the decrease in electricity spot market prices observed when PV plants feed electricity into the grid. The 2013 study showed that the total electricity demand retreated by PV production is well correlated to market prices in Italy, following a stable exponential curve. Estimating such curve enables to calculate what the additional energy payments would have been had there been no PV production. Such gain, called merit order effect, has varied over time. This study will research whether the same effect can be seen in other European countries: France, Germany, Austria, Switzerland and the Iberian Peninsula. Italian results will be extended to 2013.
The authors have run Monte Carlo simulations on a large number of irradiation profiles and showed that the merit order effect does not depend much on the PV penetration rate but rather on the electricity demand profile in Italy, and therefore on how well it correlates with the PV production profile. The social gain expressed per MWh of PV electricity fed into the grid exceeds 100 €/MWh, and has exceeded € 2 Bn at the country scale in 2012. This study will apply the same methodology again to France, Germany and the Iberian Peninsula.
Finally the effect of market coupling on the merit order effect will be tested, using the European ELIX index and comparing the effects on the French and German markets.
Keywords: economic analysis, photovoltaic production, electricity prices, merit order effect, energy mix.