The Merit Order Effect of Czech Photovoltaic Plants

Arbeitspapier

We assess the impact of photovoltaic power plants on the electricity supply curve in the Czech Republic. The merit order effect is estimated as the elasticity of electricity spot price with respect to change in supply of electricity from renewable sources. Data for the Czech electricity spot market from 2010 to 2015 are analyzed as this is the period with the steepest increase in a renewable generation capacity. The effect is estimated separately for solar and other renewable sources. We find a significant difference between these two groups. Our results show that based on hourly, daily and weekly data energy produced by Czech solar power plants does not decrease electricity spot price, creating double cost to the end consumer. However, the merit Order effect based on averaged daily and weekly data is shown to exist for other renewable sources excluding solar (mainly water and wind). This contributes to the conclusion that the Czech renewables policy that prefers solar to other renewable sources may be considered as suboptimal.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IES Working Paper ; No. 01/2017

Classification and Topics

• Classification: Wirtschaft ; Alternative Energy Sources ; Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies ; Business Economics
• Subject: energy subsidies ; photovoltaic ; renewables ; merit order effect

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lunackova, Petra ; Pruša, Jan ; Janda, Karel
• Event: Veröffentlichung
• (who): Charles University in Prague, Institute of Economic Studies (IES)
• (where): Prague
• (when): 2017

Further information

• Handle: http://hdl.handle.net/10419/174194
• Last update: 10.03.2025, 11:44 AM CET