Resumen de The determinants of EU electricity prices: wholesale and retail
Juan Ignacio Peña Sánchez de Rivera, Rosa Rodríguez López, Shanshan Yuan
This paper studies the determinants of wholesale and retail electricity prices for ten EU countries in the period 2008-2016. Demand, fuel prices, renewable-based production, weather variables and net balance between exports and imports explain monthly wholesale prices. But the economic impact of each fundamental factor varies across countries.
Wholesale prices and changes in public deficit explain the behaviour of household retail prices. Monte Carlo simulations suggest that the probabilities of achieving EU’s Climate and Energy Package target of reductions in energy consumption for horizons 2020 and 2030 are lower than 1% in all countries. CEP’s target of 20-27% generation by renewables by France and Finland present non-compliance probabilities of 80% (above 99%) and 40% (80%) respectively in horizons 2020 (2030). Empirical results cast doubts on the mutual consistency of CEP’s targets of reduction in consumption and increase in support to renewables.
