Renewable Risk and Its Impacts on Market Prices: The German Case

24 Pages Posted: 2 Aug 2021 Last revised: 16 Aug 2021

Date Written: July 20, 2021

Abstract

This paper develops a framework for renewable producers to withhold capacity from the day-ahead market in response to higher renewable output risk. The developed hypotheses are tested on a rich dataset from the German electricity market, with a novel measure of renewable forecast risk. The data does not support the presence of renewable withholding in Germany, based on the observed risk premium and day-ahead supply bids. This suggests that firms do not have access to this information or do not regard this as relevant.

Keywords: Risk, Renewables, Trading, Forecast

JEL Classification: Q47, Q41, Q48

Suggested Citation

Schnaars, Philip, Renewable Risk and Its Impacts on Market Prices: The German Case (July 20, 2021). Available at SSRN: https://ssrn.com/abstract=3890139 or http://dx.doi.org/10.2139/ssrn.3890139

Philip Schnaars (Contact Author)

University of Hamburg ( email )

Allende-Platz 1
Hamburg, 20146
Germany

Do you want regular updates from SSRN on Twitter?

Paper statistics

Downloads
37
Abstract Views
143
PlumX Metrics