Empirical Analysis of the Merit-Order Effect and the Missing Money Problem in Power Markets With High RES Shares

摘要: An on-going debate in the energy economics and power market community raises question if energy-only markets are increasingly failing due to growing feed-in shares from subsidized renewable sources (RES); argument being essentially that merit-order effect of RES production depresses day-ahead spot prices, which turn creates a situation where plant owners cannot recover investment costs (missing-money problem). We argue short not principle but rather facing several distortions hinder proper functioning, namely 1) gap between electricity volume actually traded at versus overall consumption, 2) regulatory assumption variable generation, i.e., wind photovoltaic (PV), truly has zero marginal operation grid integration costs. In this paper, we show both effects over-amplify well-known feed-in, indirectly also missing-money problem beyond level is explainable by underlying physical realities. empirically analyze impacts PV on for EPEX German-Austrian zone, region already today experiencing significant tariff (FIT)-subsidized (ca. 20% FIT share). Our analysis shows that, necessary adaptations taken, increasing market's share load demand using true units merit-order, energy-based remain functional despite high feed-in.