Climate Shocks and Electricity Prices in a Hydropower-Based System with Thermal Backup: Evidence from a Developing Economy

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dc.creatorCandelo-Viáfara, Juan Manuel
dc.creatorRivera Diaz, Maria del Pilar
dc.creatorOrrego Reyes, Juan Esteban
dc.date2026-07-14
dc.date.accessioned2026-07-15T06:00:51Z
dc.descriptionObjective: To examine the impact of extreme climate events, specifically El Niño and La Niña, on electricity prices in energy systems that rely primarily on hydropower generation with thermal backup.Design/Methodology: A Vector Autoregressive (VAR) model is employed to analyze shock transmission and the resulting price volatility. The analysis is extended using a Quantile Vector Autoregressive (QVAR) model. While the VAR model captures the average dynamic interactions among variables, the QVAR model provides a more nuanced assessment by estimating heterogeneous effects across different quantiles of the electricity price distribution.Findings: The empirical findings show that extreme climate events such as El Niño and La Niña have a statistically significant impact on electricity prices. Importantly, these effects are not evenly distributed across all price levels. Higher quantiles exhibit stronger responses, indicating that electricity prices are more sensitive to climate shocks during periods of elevated prices.Conclusions: The findings highlight the importance of incorporating climate risk into energy market models and decision-making processes. In hydropower-dependent systems, extreme climate events can trigger price spikes, which may jeopardize market stability and energy security. Therefore, adaptive planning and energy diversification strategies are crucial for managing future climate-related uncertainties.en-US
dc.descriptionObjetivo: Examinar el impacto de los fenómenos climáticos extremos, concretamente El Niño y La Niña, en los precios de la electricidad en sistemas energéticos que dependen principalmente de la generación hidroeléctrica con respaldo térmico.Diseño/metodología: Se emplea un modelo de vectores autorregresivos (VAR) para analizar la transmisión de los choques y la volatilidad de los precios resultante, y se amplía el análisis mediante un modelo de vectores autorregresivos por cuantiles (QVAR). Mientras que el modelo VAR capta las interacciones dinámicas medias entre las variables, el modelo QVAR ofrece una evaluación más matizada al estimar efectos heterogéneos en los diferentes cuantiles de la distribución de los precios de la electricidad.Resultados: Los resultados empíricos muestran que los fenómenos climáticos extremos, como El Niño y La Niña, tienen un impacto estadísticamente significativo en los precios de la electricidad. Cabe destacar que estos efectos no se distribuyen de manera uniforme en todos los niveles de precios. Los cuantiles más altos muestran respuestas más intensas, lo que indica que los precios de la electricidad son más sensibles a los choques climáticos durante los períodos de precios elevados.Conclusiones: Los resultados ponen de relieve la importancia de incorporar el riesgo climático en los modelos del mercado energético y en los procesos de toma de decisiones. En los sistemas que dependen de la energía hidroeléctrica, los fenómenos climáticos extremos pueden provocar picos de precios, lo que puede poner en peligro la estabilidad del mercado y la seguridad energética. Por lo tanto, la planificación adaptativa y las estrategias de diversificación energética son cruciales para manejar las futuras incertidumbres climáticas.es-ES
dc.formatapplication/pdf
dc.identifierhttps://revistas.itm.edu.co/index.php/revista-cea/article/view/3570
dc.identifier10.22430/24223182.3570
dc.identifier.urihttps://hdl.handle.net/20.500.12622/8186
dc.languageeng
dc.publisherInstitución Universitaria ITMen-US
dc.relationhttps://revistas.itm.edu.co/index.php/revista-cea/article/view/3570/4175
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dc.rightsCopyright (c) 2026 Juan Manuel Candelo-Viáfara, Maria del Pilar Rivera Diaz, Juan Esteban Orrego Reyesen-US
dc.rightshttps://creativecommons.org/licenses/by-nc-sa/4.0en-US
dc.sourceRevista CEA; Vol. 12 No. 30 (2026); Art. e3570en-US
dc.sourceRevista CEA; Vol. 12 Núm. 30 (2026); Art. e3570es-ES
dc.source2422-3182
dc.source2390-0725
dc.subjectfenómenos climáticos extremoses-ES
dc.subjectsistemas basados en energía hidroeléctricaes-ES
dc.subjectprecios de la electricidades-ES
dc.subjectgeneración térmica de respaldoes-ES
dc.subjecteconomías en desarrolloes-ES
dc.subjectanálisis de cuantileses-ES
dc.subjectextreme climate eventsen-US
dc.subjecthydropower-based systemsen-US
dc.subjectelectricity pricesen-US
dc.subjectthermal generation backupen-US
dc.subjectdeveloping economiesen-US
dc.subjectquantile analysisen-US
dc.titleClimate Shocks and Electricity Prices in a Hydropower-Based System with Thermal Backup: Evidence from a Developing Economyen-US
dc.titleChoques climáticos y precios de la electricidad en un sistema basado en energía hidroeléctrica con respaldo térmico: datos de una economía en desarrolloes-ES
dc.typeinfo:eu-repo/semantics/article
dc.typeinfo:eu-repo/semantics/publishedVersion

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