Swedish and Spanish electricity market : Comparison, improvements, price forecasting and a global future perspective

Sammanfattning: This report aims to make a comparison between the Swedish and Spanish electricity market, the design of new improvements that could achieve a better operation for both markets as well as the price forecasting for both spot markets. These enhancements are oriented to decrease electricity prices, energy use and the system CO2 emissions. Also, the main organizations of the market and their roles has been characterized, clarifying the functions of the Market Operator and the System Operator. In addition, the different markets, the trading products and the price formation have been explained and the picture of the market structure has been achieved with enough depth. Moreover, some of the most used methods in Time Series Analysis has been enumerated to understand which techniques are needed for forecast the electricity prices and the methodology used (Box-Jenkins Method) has been explained in detail. Later, all these methods have been implemented in an own code developed in Python 3.6 (TSAFTools .py) with the help of different statistics libraries mentioned during the method chapter. On the other hand, the description of the market situation has been carried out for both countries. Power installed capacity, electricity generation, average prices, main renewable technologies and policies to increase the renewable energy share has been analysed and corresponding described. Then, to estimate the market’s future spot electricity prices, ARIMA models have been selected to analyse the evolution of the day-ahead price using the TSAFTools.py. The final models show a proper performance in the two markets, especially in the Nordpool, achieving an RMSE: 37.68 and MAPE: 7.75 for the year in 2017 in Nordpool and a RMSE: 270.08 and MAPE: 20.24 in OMIE for 2017. Nordpool spot prices from 2015 to 2016 has been analysed too but obtaining a result not as good as the year 2017 with an RMSE: 49.01 and MAPE: 21.42. After this analysis, the strengths and weaknesses of both markets are presented and the main problems of the Spanish electricity system (power overcapacity, fuel dependency, non-cost-efficient renewable energies policies, lack of interconnexion capacity etc.) and the Swedish electricity system (dependency for nuclear power, uncertainty for solar electricity Generation) are presented. Finally, due to the quick development of the energy sector in the last years and the concern of the European Committee to reach a new design for the electricity market, different kinds of recommendations for the future have been considered.