TY - JOUR A1 - Hirth, Lion T1 - What caused the drop of European electricity prices? A factor decomposition analysis T2 - The Energy Journal N2 - European wholesale electricity prices have dropped by early two thirds since their all-time high around 2008. Different factors have been blamed, or praised, for having caused the price slump: the expansion of renewable energy; the near-collapse of the European emissions trading scheme; over-optimistic power plant investments; a decline in final electricity consumption; and cheap coal and natural gas. This ex-post study of European electricity markets from 2008 to 2015 uses a fundamental power market model to quantify their individual contributions on day-ahead prices. The two countries we study in detail, Germany and Sweden,differ significantly: fuel and CO2 prices were important price drivers in Germany, but in Sweden it was electricity demand. This difference is explained by the nature of the hydro-dominate Nordic electricity system. In both countries, however, the single largest factor depressing prices was the expansion of renewable energy. At the same time, Germany’s nuclear phase-out had an upward effect on prices. If one defines the Energiewende as the combination of these two policies, its net effect on power prices was negligible. KW - electricity price KW - ex-post analysis KW - utility crisis Y1 - 2017 UR - https://opus4.kobv.de/opus4-hsog/frontdoor/index/index/docId/2322 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-23227 UR - http://www.iaee.org/en/publications/download-view.aspx?id=3031 SN - 0195-6574 SN - 1944-9089 N1 - This is a post-peer-review, pre-copyedit version of an article published in The Energy Journal. The final authenticated version is available online at: DOI 10.5547/01956574.39.1.lhir VL - 39 IS - 1 SP - 143 EP - 157 ER -