Analysis of the dynamics of the Italian day-ahead wholesale electricity market from an economic perspective

The spot electricity market of Italy, which is a product of electricity market liberalization that swept across Europe during the latter part of the 20th century, currently plays the host to the day ahead market where a major share of electricity is traded. However, it is limited with challenges posed by the uncertainty created by the growing share of renewable energy sources and the inability to store generated electricity. The Intraday market plays a crucial role in acting as a balancing agent that facilitates flexibility to adjust prices, in turn helping to stabilize the entire power supply system in the country. Owing to the significant roles played by both these markets in the country’s power system, the present paper studies the price dynamics of the two markets and the interrelationship between them taking 2019 as the study period.