Renewable Electric Energy Integration: Quantifying the Value of Design of Markets for International Transmission Capacity
Abstract
Integrating large quantities of supply-driven renewable electricity generation remains a political and operational challenge. One of the main obstacles in Europe to installing at least 200 GWs of power from variable renewable sources is how to deal with the insufficient network capacity and the congestion that will result from new flow patterns. We model the current methodology for controlling congestion at international borders and compare its results, under varying penetrations of wind power, with a model that simulates an integrated European network that utilises nodal/localised marginal pricing. The nodal pricing simulations illustrate that congestion - and price - patterns vary considerably between wind scenarios and within countries, and that a nodal price regime could make fuller use of existing EU network capacity, introducing substantial operational cost savings and reducing marginal power prices in the majority of European countries.Download Info
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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 1166.Length: 47 p.
Date of creation: 2011
Date of revision:
Handle: RePEc:diw:diwwpp:dp1166
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Related research
Keywords: Power market design; renewable power integration; congestion management; transmission economics;This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-11-07 (All new papers)
- NEP-ENE-2011-11-07 (Energy Economics)
- NEP-EUR-2011-11-07 (Microeconomic European Issues)
References
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- Brunekreeft, G. & Neuhoff, K. & Newbery, D., 2004.
"Electricity transmission: an overview of the current debate,"
Cambridge Working Papers in Economics
0463, Faculty of Economics, University of Cambridge.
- Brunekreeft, Gert & Neuhoff, Karsten & Newbery, David, 2005. "Electricity transmission: An overview of the current debate," Utilities Policy, Elsevier, vol. 13(2), pages 73-93, June.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Holmberg, P. & Lazarczyk, E., 2012.
"Congestion management in electricity networks: Nodal, zonal and discriminatory pricing,"
Cambridge Working Papers in Economics
1219, Faculty of Economics, University of Cambridge.
- Holmberg, Pär & Lazarczyk, Ewa, 2012. "Congestion Management in Electricity Networks: Nodal, Zonal and Discriminatory Pricing," Working Paper Series 915, Research Institute of Industrial Economics.
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