Comparative analysis of features of Polish and Lithuanian Day-ahead electricity market prices

Abstract

The goal of this article is to better understand the processes of electricity market price formation in Poland and Lithuania through an analysis of the features (volatility and spikes) of Lithuanian and Polish day-ahead electricity market prices and to assess how acquired electricity price features could affect the achievement of the main goals of the national energy policy. The following indicators have been calculated to determine electricity market price volatility: the oscillation coefficient, the coefficient of variation, an adjusted coefficient of variation, the standard deviation indicator, the daily velocity indicator (based on the overall average price) and the daily velocity indicator (based on the daily average price). Critical values for electricity market price have been calculated to evaluate price spikes. This analysis reveals that electricity market-price volatility is moderate in Poland and high in Lithuania. Electricity price spikes have been an observable phenomenon both in Lithuanian and in Polish day-ahead electricity markets, but they are more common in Lithuania, encompassing 3.15% of the time period analysed in Poland and 4.68% of the time period analysed in Lithuania. Volatile, spiking and increasing electricity prices in day-ahead electricity markets in Lithuania and Poland create preconditions and substantiate the relevance of implementation of the national energy policies and measures.