This report focuses on the effect of wind energy on the electricity price in the power market. As the report will discuss, adding wind into the power mix has a significant influence on the resulting price of electricity, the so called merit order effect (MOE).
The merit order effect has been quantified and discussed in many scientific publications. This report ends the first phase of a study on the MOE carried out for EWEA by consultants Pöyry, evaluating the impact of EWEA’s 2020 scenarios on future European electricity prices.
The basic principles of the merit order effect are provided in the first part of the document, which gives the reader the necessary background to follow the subsequent literature review. The literature review itself contains methods and tools not only to quantify the merit order effect but also in order to forecast its future range and volume.