Publication detail

The Merit Order Effect of Czech Photovoltaic Plants

Author(s): prof. Ing. Karel Janda M.A., Dr., Ph.D.,
PhDr. Petra Luňáčková ,
Jan Průša M.Phil. (Cantab), Ph.D.,
Type: IES Working Papers
Year: 2017
Number: 1
ISSN / ISBN:
Published in: IES Working Papers 01/2017
Publishing place: Prague
Keywords: energy subsidies; photovoltaic; renewables; merit order effect
JEL codes: Q42; H23; M21
Suggested Citation: Lunackova P., Prusa J., Janda K. (2017). ”The Merit Order Effect of Czech Photovoltaic Plants” IES Working Paper 1/2017. IES FSV. Charles University.
Abstract: 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.
Downloadable: wp_2017_01_lunackova

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