Study: RES penetration and Electricity market prices in Greece

Wednesday, 09 Μarch 2022

The escalation of natural gas prices in 2021 dragged electricity prices to unprecedented levels due to the high participation of gas in the energy mix of European electricity systems. What was the effect of variable RES penetration on the formation of the market clearance prices (MCP) regarding the Greek market? What would be the MCP if the production from RES was absent from the energy mix?

These questions are addressed in a study conducted by iWind on behalf of the Hellenic Wind Energy Association, which can be downloaded below.

The first question has been answered with a statistical analysis of the time series of the market prices in 2021. For the second question we use a forecasting software implementing neural networks to correlate the prices of electricity with the basic parameters that affect them, such as the price of gas, the price of carbon dioxide per ton, the penetration of each form of energy etc.

The following conclusions emerge of the analysis:

A] During periods of high penetration of wind and  photovoltaic energy in the electrical system, the price in the wholesale electricity market decreases significantly.

For example, during December 2021:

  • a 10% increase in the penetration of wind energy in the system was resulting to a price’s reduction by 40 € / MWh on average.
  • an increase of 10% in the penetration of variable RES, wind and photovoltaic together, was resulting to a price’s reduction by € 34 / MWh on average.

Β] Wind energy and photovoltaics have reduced the market price by 46€/MWh on average in 2021.

Especially for December 2021 the reduction was 81€/MWh. December’s results are in line with the corresponding results of the research team of AUTh that were recently announced by the Ministry of Energy, despite the different methodology that was used.

Assuming that the energy that was not produced by RES would have been produced by imported natural gas, the above reduction for 2021 implies that the total savings in the wholesale market is 2.5 billion euros thanks to RES. This means that if RES did not exist, suppliers would have had to pay more 2.5 billion euros for the energy market; an amount that would have been passed on to consumers. This amount is 4 times higher than the regulated ETMEAR fee.

You may download the study HERE.

You may visit the relevant post at iWind’s web site HERE