It is well known that day-ahead prices in power markets exhibit spikes. These spikes are sudden increases in the day-ahead price that occur because power production is not flexible enough to respond to demand and/or supply shocks in the short term. This paper focuses on how temperature influences the probability on a spike. The paper shows that the difference between the actual and expected temperature significantly influences the probability on a spike and that the impact of temperature on spike probability depends on the season.

Additional Metadata
Keywords Day-ahead power price, Power production, Spike probability, Temperature
JEL Corporate Finance and Governance (jel G3), Business Administration and Business Economics; Marketing; Accounting (jel M), Transport, International and Domestic Trade, Energy, Technology, and Other Services (jel N7)
Publisher Erasmus Research Institute of Management (ERIM)
Persistent URL
Huisman, R. (2007). The Influence of Temperature on Spike Probability in Day-Ahead Power Prices (No. ERS-2007-039-F&A). ERIM report series research in management Erasmus Research Institute of Management. Erasmus Research Institute of Management (ERIM). Retrieved from