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Wind Power and the Electricity Wholesale Price Volatility: -An empirical study of the effect of wind power on the Swedish energy market
Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
2018 (English)Independent thesis Advanced level (degree of Master (Two Years)), 10 credits / 15 HE creditsStudent thesis
Abstract [en]

The objective of this thesis is to estimate the effect of an increasing wind power sector in Sweden on the electricity wholesale price volatility. Previous studies on other energy markets have found a positive correlation but the Swedish market is interesting due to its large hydropower capacity. In this study, hourly data from the Swedish energy market between the period 2016-2017 was collected. A GARCH model was used to estimate how the amount of electricity generated by wind power affects both the level and volatility of the electricity wholesale price. In accordance with previous studies and expected outcomes, wind generation is proven to be negatively correlated with the electricity price level. That is, a merit order effect is found in the context of the Swedish energy market. Other studies have found a positive relationship between wind generation and price volatility, but this study fails to yield a significant result. This means that in the Swedish case, an expanding wind power sector does not affect the electricity price volatility to date.

Place, publisher, year, edition, pages
2018.
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-149798OAI: oai:DiVA.org:umu-149798DiVA, id: diva2:1227858
Available from: 2018-06-27 Created: 2018-06-27 Last updated: 2018-06-27Bibliographically approved

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Citation style
  • apa
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  • de-DE
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  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
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