Renewable energy regulation and structural breaks: An empirical analysis of Spanish electricity price volatility
| Autor: | Aitor Ciarreta, Ainhoa Zarraga, Cristina Pizarro-Irizar |
|---|---|
| Přispěvatelé: | BERC, Fondo Europeo de Desarrollo Regional, Innovación y Universidades, MINECO/FEDER, Ministerio de Ciencia, Ministerio de Economa y Competitividad, Ministerio de Economa y Competitividad MINECO |
| Jazyk: | angličtina |
| Rok vydání: | 2020 |
| Předmět: |
Economics and Econometrics
Electricity price volatilities Electricity price 020209 energy Autoregressive conditional heteroskedasticity Tariff 02 engineering and technology Monetary economics alternative energy renewable resource 0502 economics and business 0202 electrical engineering electronic engineering information engineering Economics regulatory framework 050207 economics Investments price dynamics Renewable electricity Electricity spot price business.industry 05 social sciences Commerce Renewable energies Empirical analysis Renewable energy Costs Regulatory systems General Energy Incentive International experiences Spain Regulatory policies Electricity Volatility (finance) business Energy policy electricity supply Operating costs |
| Zdroj: | Addi. Archivo Digital para la Docencia y la Investigación instname Addi: Archivo Digital para la Docencia y la Investigación Universidad del País Vasco |
| Popis: | International experience proves that electricity prices have undergone major changes in volatility since the entry of green technologies. The intermittency of renewable sources is one of the reasons for these changes, as it leads to higher volatility in periods of higher participation by renewables. We argue that the development of the regulatory system promoting renewable electricity also plays a crucial role. We raise a question that deserves attention: could an incentive scheme induce higher share of renewables and lower volatility simultaneously? In this paper, we conduct an empirical analysis with Spanish data. We analyze possible ensuing structural changes in Spanish electricity spot price volatility from January 2002 to December 2017. We identify two structural breaks linked to important measures related to renewable electricity: (i) the abolishment of the feed-in tariff scheme; and (ii) the establishment of a more market-oriented regulation based on investment and operating costs. We conclude that stable regulatory policies reduce volatility even though the presence of renewable sources is greater. Furthermore, market-based policy measures achieve lower volatility, encouraging good integration of intermittent renewable electricity. © 2020 Elsevier B.V. Financial support from Ministerio de Economa y Competitividad and Fondo Europeo de Desarrollo Regional under research grant ECO2015-64467-R (MINECO/FEDER) and from Dpto. de Educación, Universidades e Investigación del Gobierno Vasco under research grant IT1336-19 is acknowledged. Cristina Pizarro-Irizar also acknowledges financial support from Ministerio de Economa y Competitividad under research grant ECO2015-68023 , Ministerio de Ciencia, Innovación y Universidades under research grant RTI2018-093352-B-I00 , Gobierno Vasco through the BERC 2018-2021 program and by Ministerio de Economa y Competitividad MINECO through BC3 Maria de Maeztu excellence accreditation MDM-2017-0714 . All the authors are grateful for the valuable comments made by participants in the 41st International Conference of the International Association for Energy Economics and the 14th Conference of the Spanish Association for Energy Economics. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|