Renewable Energy and Price Stability: An Analysis of Volatility and Market Shifts in the European Electricity Sector (2015–2025)
Marek Pavlík, František Kurimský, Kamil Ševc
Abstract
This research paper analyses the evolution of electricity price volatility in six European countries between 2015 and 2025, focusing on the relationship between the increasing penetration of renewable energy sources (RES) and short-term price fluctuations. Based on high-frequency data (at 15 min to hourly resolution) on electricity prices, solar and wind generation, and residual load, both year-on-year and structural changes in volatility are quantified. The results show a significant increase in volatility after 2021, with outliers appearing particularly during the 2022 energy crisis, most notably in countries with a high share of RES and limited system flexibility. The analysis identifies non-linear relationships between RES generation and the occurrence of negative prices, with country-specific threshold levels. Annual regression models show that the predictive power of these relationships is time-varying and influenced by externalities. The correlation matrices confirm regional differences in the impact of RES on price dynamics. The results support the design of rules for forecasting risk periods and point to the need for market mechanisms increasing flexibility, including accumulation, demand management, and cross-border integration.