Final Report Summary - AADAMS (Auction and Day-Ahead Markets Spikes)
Therefore, we show that the stochastic nature of intermittent generation poses a new set of distributional properties for the power price risks. These results are based on the German market, which is leading the trend in these effects of renewable generation, but can be easily generalized to many other markets which are already showing the same influences. As consequence, AaDAMS’ methodology and findings represent an important tool for market operators and energy regulators to measure the implications of increasing renewable energy supplies on wholesale electricity prices.
These negative prices signify a lack of investment in flexible generation and more importantly an absence of market coupling. For instance, in case of low or negative prices in Germany, the other interconnected markets (as France, Denmark and Sweden, among others) will import German electricity until the cross-border capacity is fully used or prices converge.
Additionally, regulatory practices adopted worldwide in both the electricity and gas sectors have been explored. It has been shown that there exists a form of implicit common direction representing a potential trans-governmental network for energy policy able to affect the adoption of “best practices” even accounting for dissimilarities across countries. Some evidence of integration, (anticipatory) adaptation and Europeanization is also provided.