The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016 : estimation and distributional implications

Cludius, Johanna; Hermann, Hauke; Matthes, Felix Chr.; Graichen, Verena

doi:10.1016/j.eneco.2014.04.020

Publication type:	Article in scientific journal
Type of review:	Peer review (publication)
Title:	The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016 : estimation and distributional implications
Authors:	Cludius, Johanna Hermann, Hauke Matthes, Felix Chr. Graichen, Verena
DOI:	10.1016/j.eneco.2014.04.020
Published in:	Energy Economics
Volume(Issue):	44
Page(s):	302
Pages to:	313
Issue Date:	2014
Publisher / Ed. Institution:	Elsevier
ISSN:	0140-9883 1873-6181
Language:	English
Subjects:	Renewable electricity; Merit order effect; Industry exemption; Distributional implication
Subject (DDC):	333.79: Energy
Abstract:	Generation from renewable energy sources in Germany has experienced a considerable uptake in recent years. Mainly responsible for this development is the German Renewable Energy Sources Act (Erneuerbare Energien Gesetz, EEG). This paper considers redistributive implications of the EEG for different electricity consumers. Using time-series regression analysis, we show that electricity generation by wind and PV has reduced spot market prices considerably by 6 €/MWh in 2010 rising to 10 €/MWh in 2012. We use these results to build a near-term forecasting tool for merit order effects, projected to reach 14-16 €/MWh in 2016. On the other hand, the costs of the EEG are passed forward to consumers in the form of a surcharge. Our findings highlight significant redistributive transfers under the current design of the EEG. In particular, some energy-intensive industries are benefiting from lower wholesale electricity prices whilst being largely exempted from contributing to the costs of the scheme. We also highlight implications of our results for other areas for reform of the EEG, such as adequate remuneration mechanisms that ensure efficient operation and investment decisions are made under the scheme. More generally, these findings suggest that policy makers need to integrate distributional assessments into policy design and implementation.
URI:	https://digitalcollection.zhaw.ch/handle/11475/12684
Fulltext version:	Published version
License (according to publishing contract):	Licence according to publishing contract
Departement:	School of Management and Law
Appears in collections:	Publikationen School of Management and Law

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Cludius, J., Hermann, H., Matthes, F. Chr., & Graichen, V. (2014). The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016 : estimation and distributional implications. Energy Economics, 44, 302–313. https://doi.org/10.1016/j.eneco.2014.04.020

Cludius, J. et al. (2014) ‘The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016 : estimation and distributional implications’, Energy Economics, 44, pp. 302–313. Available at: https://doi.org/10.1016/j.eneco.2014.04.020.

J. Cludius, H. Hermann, F. Chr. Matthes, and V. Graichen, “The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016 : estimation and distributional implications,” Energy Economics, vol. 44, pp. 302–313, 2014, doi: 10.1016/j.eneco.2014.04.020.

CLUDIUS, Johanna, Hauke HERMANN, Felix Chr. MATTHES und Verena GRAICHEN, 2014. The merit order effect of wind and photovoltaic electricity generation in Germany 2008–2016 : estimation and distributional implications. Energy Economics. 2014. Bd. 44, S. 302–313. DOI 10.1016/j.eneco.2014.04.020

Cludius, Johanna, Hauke Hermann, Felix Chr. Matthes, and Verena Graichen. 2014. “The Merit Order Effect of Wind and Photovoltaic Electricity Generation in Germany 2008–2016 : Estimation and Distributional Implications.” Energy Economics 44: 302–13. https://doi.org/10.1016/j.eneco.2014.04.020.

Cludius, Johanna, et al. “The Merit Order Effect of Wind and Photovoltaic Electricity Generation in Germany 2008–2016 : Estimation and Distributional Implications.” Energy Economics, vol. 44, 2014, pp. 302–13, https://doi.org/10.1016/j.eneco.2014.04.020.