Modelling German electricity wholesale spot prices with a parsimonious fundamental model - Validation & application

In this paper, we introduce a parsimonious fundamental model for the German day-ahead market. The methodology approximates the supply stack by a piecewise linear function and considers fundamental information, e.g. power plant availabilities, must-run production and cross-border exchange. We reduce complexity by considering technology classes, uncoupled time periods and only one market area. The model accurately reproduces the hourly historical prices and electricity production volumes for most thermal production units in Germany. In a case study, we investigate the effects of the German nuclear phase-out decision. We find an additional price decrease and reduced electricity imports in the counterfactual scenario.