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Quantifying the economic efficiency impact of inaccurate renewable energy price forecasts

Author:
Croonenbroeck, Carsten, Hüttel, Silke
Source:
Energy 2017 v.134 pp. 767-774
ISSN:
0360-5442
Subject:
energy, energy costs, wind power
Abstract:
We demonstrate a simple approach to quantify economic efficiency losses due to inaccurate energy price forecasts. We show that empirically, forecasting errors have their impact on efficiency losses. There are hints that suggest a time-dependent pattern of deadweight losses. Solar infeed, which is considered to be a strongly volatile form of energy, increases the efficiency loss of energy allocations. For wind power, however, this effect is not significant. After all, we provide yet another argument for the requirement of even more accurate forecasts in order to decrease unwanted losses of economic efficiency, even though we show that at their current state, forecasts are fairly accurate already.
Agid:
5730239