This work analyses the effect on the daily electricity market of the authorisation of 3,909 MW of new
photovoltaic (PV) power in Spain in 2017 –as a contribution to the EU environmental objectives for 2030.
To estimate the impact of this additional offer, we use real data from the supply and demand curves of the
Iberian (Spain and Portugal) daily electricity market. Our data is available for all the hours of the full year
between August 1, 2016 and July 31, 2017. In this period, more than 800 agents have participated in the
market, generating more than 15 million operations. In order to calculate the new supply function for each
hour, the hourly production of these new facilities is added to the offer at zero price, since their marginal
costs are very close to zeroand correspond to the offers that are being made by the current PV bidders. By
using static and dynamic (multilevel) analyses, the variations of prices, quantities, emissions and surpluses of
buyers and sellers are calculated. As the economic theory foresees, the new supply curve causes a decrease in
average prices of 2.7 €/MWh in daylight hours(or 1.5€/MWh considering all the hours of the year), and
an8% reduction in the income of the PV plants currently in operation (incumbents). The substitution of
combined cycle energy (the technology expulsed) by PV energy brings about a saving of 2.2 million Mt of
CO2 eq. In terms of economic welfare, the incorporation of PV power produces an increase in the total surplus
of about 300 M€ each year
