Abstract
This study aims to explore the relationship between renewable energies and the electric power spot price of the Japan Electric Power Exchange (JEPX). By using panel data analysis and proxy modeling, this work attempts to estimate how renewable energies (displayed through the proxies) and other factors influence the electric power spot price in Japan. Based on an analysis of the estimations, some policy implications have been proposed, such as to incorporate weather information into the price forecast, or to provide a guide to more effectively transact on the JEPX.
Highlights
Since electricity was first used in Japan on 25 March 1878, the electric power supply has been increasingly vital for the Japanese economy
There have been several studies conducted to measure the effects of renewable energy penetration on the electric power spot price
The total transactions being traded on the exchange market often account for at least 40% of the whole market, of which renewable energies make up for about 30% of the energy mix (METI [30])
Summary
Since electricity was first used in Japan on 25 March 1878, the electric power supply has been increasingly vital for the Japanese economy. (2) no competitive market because of monopolized pricing; (3) ineffectiveness in the energy mix with an increasing portion of renewable energies not being fully utilized To address such thorny issues, the Ministry of Economy, Trade, and Industry (METI) has launched several reforms since 1995. Electric power transactions are expected to be traded on the JEPX in the future to enhance the efficiency and effectiveness of this market. We try to answer the following question in this paper: To what extent do renewable energies impact the spot price of electric power on the JEPX?. The aim of this research is to measure how the spot price of electric power on the JEPX is influenced by the production of renewable energies. The literature review summarizes some significant work carried out to measure the effects of renewable energies, seasonality, and regional features on electric power price.
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