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
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
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