Causality relationships between Lithuanian day-ahead electricity price and its factors

Abstract

The aim of this paper is – after the review of scientific literature on the issue of factors forming day-ahead electricity price worldwide, to assess causality relationships between electricity price and the selected price elements. Literature analysis and Granger causality test are employed to implement the aim. The results of the analysis told that Estonian, Finish, Nord Pool prices and trade volumes, as well electricity consumption and production volume in Lithuania, net electricity import volume from Russia, Belarus and Latvia and electricity trade volume in Lithuanian power exchange Granger caused day-ahead electricity price in Lithuania. The impact of air temperature and exchange rate, as well the impact of prices of resources used in electricity production indirectly Granger caused Lithuanian day-ahead electricity price.