An analysis of the decline of electricity spot prices in Europe: Who is to blame?

The goal of this study is to analyze the contribution of different price drivers to this decline. Thus, an agent-based modeling and a regression approach are applied to investigate the effect of price drivers and to verify model results by comparing both approaches. Our results show that, against the public perception, the impact of carbon and coal prices on German electricity prices has been twice as high as the renewable expansion between 2011 and 2015. Furthermore, if carbon and coal prices do not recover to at least the level of 2011, electricity prices will remain on the current low level complicating the economic operation of gas power plants.