Reaching New Lows? The Pandemic's Consequences for Electricity Markets

58 Pages Posted: 15 Jun 2020 Last revised: 7 Jul 2021

See all articles by David Benatia

David Benatia

HEC Montreal; CREST-ENSAE

Samuel Gingras

affiliation not provided to SSRN

Date Written: June 10, 2020

Abstract

The COVID-19 crisis has disrupted electricity systems worldwide. This article disentangles the effects of the demand reductions, fuel price drops, and increased forecast errors on New York's day-ahead and real-time markets by combining machine learning and structural econometrics. From March 2020 to February 2021, statewide demand has decreased by 4.6 TWh (-3%) including 4 TWh (-8%) for New York City alone, and the day-ahead market has depreciated by $250 million (-6%). The real-time market has, however, appreciated by $15 million (+23%) because of
abnormally large forecast errors which significantly undermined system efficiency.

Keywords: COVID-19, Demand, Energy, Electricity Markets

JEL Classification: L94, Q02, Q41, Q47

Suggested Citation

Benatia, David and Benatia, David and Gingras, Samuel, Reaching New Lows? The Pandemic's Consequences for Electricity Markets (June 10, 2020). USAEE Working Paper No. 20-454, Available at SSRN: https://ssrn.com/abstract=3623966 or http://dx.doi.org/10.2139/ssrn.3623966

David Benatia (Contact Author)

HEC Montreal ( email )

3000, Chemin de la Côte-Sainte-Catherine
Montreal, Quebec H2X 2L3
Canada

CREST-ENSAE ( email )

France

Samuel Gingras

affiliation not provided to SSRN

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