The merit order effect of photovoltaic generation in Slovakia
|Author:||Bc. Michaela Koščová|
|Year:||2017 - summer|
|Leaders:|| prof. Ing. Karel Janda M.A., Dr., Ph.D.
|Work type:|| Bachelors
|Awards and prizes:|
|Abstract:||Photovoltaics in Slovakia have been experiencing a fast development in the last years,
benefiting from a large support in various forms - be it generous subsidies and guaranteed
feed-in tariff or legal preferential treatment. Due to very low - close to zero marginal
costs it may appear that the green energy generated by solar power plants is “free” thus
we expect a decrease in the wholesale electricity price. Indeed, in several countries the socalled
merit order effect has been proven and the spot price of electricity declines thanks
to the generation from the photovoltaics and/or other renewable sources.
This thesis evaluates the impact of the solar energy penetration into energy mix
on spot prices, seeks evidence of the merit order effect in the Slovak electricity market
and quantifies it thanks to publicly available data. The multivariate regression analysis
takes into consideration the full years 2011-2016. The merit order effect estimated by an
OLS time series model is negative, however, the spot price reduction attributable to the
photovoltaics is not sufficient for resulting savings to outweigh the costs of the support
scheme borne by end users what implies a consumer loss.