Publication detail

The Merit Order Effect of Czech Photovoltaic Plants

Author(s): prof. Ing. Karel Janda M.A., Dr., Ph.D.,
PhDr. Petra Luňáčková Ph.D.,
Jan Průša M.Phil. (Cantab), Ph.D.,
Type: Articles in journals with impact factor
Year: 2017
Number: 106
ISSN / ISBN:
Published in: Energy Policy 106, pp. 138-147
Publishing place:
Keywords: energy subsidies; photovoltaic; renewables; merit order effect
JEL codes: Q42; H23; M21
Suggested Citation:
Abstract: We assess the impact of photovoltaic power plants on the electricity supply curve in the Czech Republic. The
merit order effect is estimated as the elasticity of electricity spot price with respect to change in supply of
electricity from renewable sources. Data for the Czech electricity spot market from 2010 to 2015 are analyzed as
this is the period with the steepest increase in a renewable generation capacity. The effect is estimated separately
for solar and other renewable sources. We find a significant difference between these two groups. Our results
show that based on hourly, daily and weekly data energy produced by Czech solar power plants does not
decrease electricity spot price, creating double cost to the end consumer. However, the merit order effect based
on averaged daily and weekly data is shown to exist for other renewable sources excluding solar (mainly water
and wind). This contributes to the conclusion that the Czech renewables policy that prefers solar to other
renewable sources may be considered as suboptimal.

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