Abstract
By means of regression analysis, we address the price impact of intermittent renewable energy sources (wind, solar and waves) for the Mibel Iberian Market (Portugal and Spain) during the period spanning from 2010 to 2015. Our results suggest that: i) intermittent renewable energy has a material negative effect on electricity price; ii) the merit-order effect varies depending on the technology employed: wind power appears to produce a greater impact on price vis-a-vis solar photovoltaic energy; iii) there is no evidence corroborating the idea that the impact of intermittent renewable electricity penetration is declining over time; and iv) the market coupling with France, in effect since May 2014, led to a decrease in the sensitivity of price to intermittent renewable energy production. Our results are useful for risk management purposes and to support policy-makers and utilities in defining the optimal generation mix.
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