Carbon Pricing and Merit-Order Effects in Day-Ahead Electricity Markets
Sofia Petrova & Jakub Novak
A causal analysis of how carbon price shocks propagate through day-ahead electricity markets in three interconnected European bidding zones. Exploiting a discrete change in allowance prices, we estimate pass-through to wholesale prices and quantify the displacement of coal by gas and renewables in the merit order.
DOI: 10.5072/zenodo.1000002