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Title:
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A Nodal Pricing Analysis of the Future German Electricity Market
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Author(s):
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Ozdemir, O.; Hers, J.S.; Bartholomew Fisher, Emily; Brunekreeft, Gert; Hobbs, B.F.
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Published by:
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Publication date:
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ECN
Policy Studies
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27-5-2009
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ECN report number:
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Document type:
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ECN-M--09-093
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Conference Paper
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Number of pages:
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Full text:
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7
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Download PDF
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Presented at: EEM09 Conference, Leuven, Belgium, 27-29 mei 2009.
Abstract:
Abstract— The electricity market in Germany is likely to undergo
several significant structural changes over the years to
come. Here one may think of Germany’s ambitious renewable
agenda, the disputed decommissioning of nuclear facilities, but
also unbundling of TSO’s as enforced by European regulation.
This study is a scenario-based analysis of the impact of different
realizations of known investment plans for transmission and generation
capacity on the future German power market while accounting
for internal congestion. For this analysis the static equilibrium
model of the European electricity market COMPETES is
deployed, including a 10-node representation of the German highvoltage
grid. Results for the multi-node analysis indicate that
price divergence and congestion are likely to arise in the German
market as renewable additions affecting mainly the North of
Germany, the debated decommissioning of nuclear facilities in the
South, and the expected decommissioning of coal-fired facilities in
Western Germany appear to render current investment plans for
transmission capacity insufficient. The current system of singlezone
pricing for the German market may therewith be compromised.
However, transmission additions would not benefit all
market parties, with producers in exporting regions and consumers
in importing regions being the main beneficiaries. Vertical
unbundling of German power companies could increase the incentive
for constructing transmission lines if generation capacity
would cause Germany to be a net-importing country. In case
Germany remains a net-exporting country, the effects of vertical
unbundling on cross-border capacity are less clearcut.
Index Terms— complementarity problem, electricity market,
investment, market power, nodal pricing, partial equilibrium
model, transmission system unbundlin
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