*Article* **Merit Order E**ff**ect Modeling: The Case of the Hellenic Electricity Market**

#### **Stelios Loumakis \*, Eugenia Giannini and Zacharias Maroulis**

Laboratory of Process Analysis and Design, National Technical University of Athens, 15780 Athens, Greece; evgenia@gianninilaw.eu (E.G.); maroulis@mail.ntua.gr (Z.M.)

**\*** Correspondence: steliosloumakis@gmail.com; Tel.: +30-694-477-7331

Received: 10 September 2019; Accepted: 10 October 2019; Published: 12 October 2019

**Abstract:** A simple effective model is proposed for the day-ahead electricity market. The model considers the main factors which govern the process, predicts the seasonal and daily variation of electricity demand, renewable production, system marginal price, and merit order effect. The accuracy of the model is increased by fitting to historic data of the Hellenic electricity market. During the period between October 2016 and December 2018, the Hellenic electricity market calculated explicitly the merit order effect using an innovative mechanism to directly charge the electricity suppliers (retailers). On the basis of the proposed model and the market recorded data, the effect of the renewable penetration on the wholesale Hellenic electricity prices is revealed. The model is further used to analyze the market future behavior when basic factors (electricity demand, conventional power, and renewable penetration) are known or estimated. The effect of merit order effect on the Hellenic legislation is discussed and the appropriate measures adopted by the Hellenic authorities are analyzed and evaluated.

**Keywords:** system marginal price; renewable energy sources; photovoltaics; day ahead market; merit order curve; electricity demand; seasonal and daily variation; RES (renewable energy sources) surcharge
