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
Publisher Erasmus Research Institute of Management (ERIM)
Persistent URL hdl.handle.net/1765/10179
Citation
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 http://hdl.handle.net/1765/10179