The Value of Value Factors : Time-dependent Development of Value Factors on the Swedish Electricity Market

Abstract: This bachelor thesis investigates the development of value factors on the Swedish electricity market and how the development can be explained. Value factor is a parameter that indicates how well an energy source’s market price corresponds to the average spot price for the electricity mix. Value factors for nuclear-, thermal-, wind-, solar- and hydropower are calculated for the years 2014-2019. Electricity production- and spot price data has been sourced from Svenska Kraftnät, Nord Pool and Uppsala University. The influence of weather conditions, spot price, production and consumption on the development of the value factors is discussed. The Pearson correlation coefficient is used for analytical purposes, showing the correlation between two specific variables. The conclusion is that the value factor for each power source is the result of the conditions present during the specific time period. The value factors for solar- and thermal power are discontinuous since they are temperature-dependent. For nuclear-, wind- and hydropower, the value factors are more continuous during the time span. This is due to, for instance, their important roles in the Swedish energy system and their ability to match demands.