An Analysis of the Determinants of Nodal Prices in the Electricity Spot Market of Hubei Province

The research investigates the main factors affecting nodal prices in the Hubei electricity spot market. A two-way fixed effects panel data model is developed using real-time data from various power generation units. The study empirically analyzes three key variables: total renewable output, total generation output, and total output from non-market-based units. Results show that renewable energy significantly reduces prices due to its low marginal cost and priority dispatch. Total generation output is positively correlated with nodal prices, reflecting supply-demand tightness. Non-market-based generation tends to lower prices by reducing the clearing space for market-based units. These findings provide quantitative support for optimizing pricing mechanisms and dispatch strategies in power markets with high renewable penetration.