Electricity Price Analysis for Renewable Energy Dominated Electricity Markets under Extreme Scenarios

The COVID-19 pandemic, the energy crisis, the outbreak of the Russia-Ukraine war, and the rapid development of renewable energy electricity generation in European countries brought risks to electricity market operations, which are shown as high fluctuations in electricity prices. In order to explore the price risks of electricity markets in European countries, this paper studies the annual average electricity spot price and their fluctuations in each country, and compares them based on the renewable energy percentage of the country and inter-country power exchanges. It was found that under periods with extreme energy supply/consumption situations, a high proportion of hydropower generation may aggravate the price fluctuation of the electricity market. Meanwhile, electricity systems with high wind and solar generations are highly rely on natural gas, and hence be affected by gas/oil markets. Finally, cross-border electricity transactions might trigger electricity price fluctuations under extreme circumstances. Keywords Extreme scenarios, electricity market risk, electricity price fluctuation, high penetration renewable energy, cross-border electricity trading.