Self-reinforcing deflationary price dynamics under the variable market premium scheme

Kristina Nienhaus,Martin Klein,Christoph Schimeczek,Marc Deissenroth,Ulrich J. Frey

Self-reinforcing deflationary price dynamics under the variable market premium scheme

2020

Kristina Nienhaus
Martin Klein
Christoph Schimeczek
Marc Deissenroth
Ulrich J. Frey

We report a potential self-reinforcing design flaw in the variable market premium scheme that occurs if variable renewable energy power plants receiving a premium become price-setting in the market.

Keywords:

Economics
Power (physics)
Deflation
Scheme (programming language)
Variable renewable energy
Econometrics
Variable (computer science)

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