Determinants of Electricity Price in Competitive Power Market

Abstract

In this study we investigate the factors which determine electricity prices in competitive power markets. This study not only gives a snapshot of important factors to be considered while modelling and forecasting electricity prices but also addresses the issue of electricity spot price pre-processing techniques used in the literature and the Stylized facts related to electricity markets. This study encourages and motivates entrepreneurs to look at power trading sector, which has traditionally been a bastion of technical expertise, but now, has stakeholders from all sections of society and businesses particularly with growing influx of financial experts due to deregulation, liberalization of electricity markets and introduction of power/energy exchanges around the world.