Publications / Articles
Increasing photovolatic production and the electricity marketPublished: 1 of September, 2012

For the last two years the difference between the price of baseload and peak products (peak spread) quoted on electricity exchanges has substantially narrowed for several European countries, including Germany and Spain – and this trend seems intact in 2012 as well. The key explanation for this phenomenon is the soaring photovoltaic (PV) production: solar PV plants can generate abundant energy during the daylight peak hours, and the feed-in-tariff scheme brings about significant additional supply, suppressing the price of peak load energy. In the article we explore the price lowering impact of the PV plants, primarily in the case of Germany, and we also inspect the influence that lower spreads may make on the generating mix and hence the longer term development of the electricity market.