Master Thesis: Marginal Production Costs of Electricity Generating Plants

Prices on electricity markets are determined by a (largely) inelastic demand and a supply side consisting of production capacities from different technologies. Consequently, using standard assumptions, the price on electricity markets should equal the marginal production cost of the most expensive plant that is required to fulfill the inelastic demand. Marginal costs of production in the electricity sector depend on a range of factors ranging from input costs to operational costs determined by the inter-temporal production schedule of power plants. The aim of this Master Thesis is to elicit marginal cost/bids from unit generation data in combination with spot prices on the EPEX market.