Accommodating renewable energy sources in a small electricity market: An analysis considering the interactions of sources within Portugal and Spain

• Autor(a) principal: Afonso, Tiago Lopes
• Data de Publicação: 2019
• Outros Autores: Marques, António Cardoso, Fuinhas, José Alberto
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.6/11270
• topic: Iberian electricity market; VAR model; Electricity price; Generation sources; STL decomposition; Economics

The Portuguese and the Spanish electricity generation systems are analysed in this paper. The Iberian market hasbeen isolated and has an increasing proportion of renewable sources. The main objective of this study is to un-derstand how electricity generation sources are interacting with electricity wholesale prices. The VAR approachwas used because of its high robustness to cope with the endogeneity detected by Granger block Exogeneity tests.To do this, workweek data recorded since the opening of the Iberian market (July 2, 2007) was used. Despite thegeographical proximity of the countries and their access to natural resources, the results provide empirical evi-dence of different modes of interaction in the market. This outcome could be due to the different sizes of thenational systems. The Portuguese electricity generating system does not have an extensive structure to share back-up with Spain via conventional sources. Spain's substantial generation structure could be used to provide inter-mittent back-up generation for Portugal. Considering the similar supply and demand patterns of the Iberiangeneration systems, their openness to the other markets with different consumption and generation patterns couldallow a more rational utilization of the renewables already deployed and, consequently, bring greater efficiency tothe Iberian electricity market.