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Johanna Fink . Photo

Johanna Fink

Doctoral student

Johanna Fink . Photo

Can the creation of separate bidding zones within countries create imbalances in PV uptake? : Evidence from Sweden

Author

  • Johanna Fink

Summary, in English

This paper estimates how electricity price divergence within Sweden has affected incentives to invest in photovoltaic (PV) generation between 2016 and 2022 based on a synthetic control approach. Sweden is chosen as the research subject since it is together with Italy the only EU country with multiple bidding zones and is facing dramatic divergence in electricity prices between low-tariff bidding zones in Northern and high-tariff bidding zones in Southern Sweden since 2020. The results indicate that PV uptake in municipalities located north of the bidding zone border is reduced by 40.9-48% compared to their Southern counterparts. Based on these results, the creation of separate bidding zones within countries poses a threat to the expansion of PV generation and other renewables since it disincentivizes investment in areas with low electricity prices.

Department/s

  • Department of Economic History
  • Growth, technological change, and inequality

Publishing year

2023-12-26

Language

English

Pages

1-70

Document type

Preprint

Publisher

arXiv.org

Topic

  • Economic History

Keywords

  • N44
  • N54
  • N74
  • Q41
  • Q48
  • Sweden
  • Bidding Zone
  • Solar Energy
  • Electricity price

Status

Published