Global assessment of the merit order effect and revenue cannibalisation for variable renewable energy
Authors/Creators
- 1. Imperial College London, Centre for Environmental Policy
- 2. Imperial College London, Imperial Business School
- 3. Mines-Paris-Tech
Description
This is data set for the paper "Global assessment of the merit‑order effect and revenue cannibalisation for variable renewable energy". All Figures shown in the paper are produced from this data set.
Abstract:
The rapid growth of wind and solar power has been a major driver for decarbonisation worldwide. They tend to reduce wholesale electricity prices, both the time-weighted average (the merit‑order effect) and their own output-weighted average (price cannibalisation). Whilst these effects have been widely observed, most previous studies focus on single countries. Here, we compare 37 electricity markets across Europe, North America, Australia and Japan and explore variations between them.
Merit-order and cannibalisation effects are observed in nearly all countries studied. However, only in Germany, Spain, Poland, Portugal, Denmark and California can renewable output explain more than 10% of variation in wholesale electricity prices. The global average merit‑order effect is €0.68±€0.54 /MWh per percentage point increase in variable renewable energy penetration, and this falls with higher penetration. Revenues captured by wind farms decrease by 0.23% (€0.16 /MWh) for each percentage point increase of wind penetration and by 1.94% (€0.90 /MWh) for solar PV.
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