Ring the Alarm! Electricity Markets, Renewables, and the Pandemic

53 Pages Posted: 1 Oct 2020 Last revised: 9 Nov 2020

Date Written: October 1, 2020

Abstract

The pandemic's impacts on European electricity markets have been enormous, especially in countries with abundant near-zero marginal cost of production like France. This article provides an in-depth quantitative study of the impacts of the crisis on the French electricity sector. During the lockdown episode, France has experienced unparalleled demand reductions (-11.5%) and energy price falls (-40%) resulting in revenue losses of 1.2 billion € (-45%) for market participants. This paper argues that the observed market outcomes during the crisis are somehow indicative of outcomes in a future with abundant renewable power, where prices will fall in a more sustainable way.

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

JEL Classification: L94, Q02, Q41, Q47

Suggested Citation

Benatia, David, Ring the Alarm! Electricity Markets, Renewables, and the Pandemic (October 1, 2020). USAEE Working Paper No. 20-473, Available at SSRN: https://ssrn.com/abstract=3703117 or http://dx.doi.org/10.2139/ssrn.3703117

David Benatia (Contact Author)

CREST - ENSAE ( email )

France

HEC Montreal ( email )

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

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