Competition in Germany's minute reserve power market: An econometric analysis
AbstractThe German reserve power market was subject to important regulatory changes in recent years. A new market design was created by synchronization and interconnection of the four control areas. In this paper, we analyze whether or not the reforms led to lower prices for minute reserve power (MRP). In contrast to existing papers, we use a unique panel dataset to account for unobserved heterogeneity between the four German regional markets. Moreover, we control for endogeneity by using weather data as instruments for electricity spot market prices. We find that the reforms were jointly successful in decreasing MRP prices leading to substantial cost savings for the transmission system operators. --
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Bibliographic InfoPaper provided by Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE) in its series DICE Discussion Papers with number 75.
Date of creation: 2012
Date of revision:
Competition; Frequency Control; Minute Reserve Power; Regulation; Productive Efficiency; Welfare;
Other versions of this item:
- Justus Haucap, Ulrich Heimeshoff, and Dragan Jovanovic, 2014. "Competition in Germany's Minute Reserve Power Market: An Econometric Analysis," The Energy Journal, International Association for Energy Economics, International Association for Energy Economics, vol. 0(Number 2).
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
- L59 - Industrial Organization - - Regulation and Industrial Policy - - - Other
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-12-10 (All new papers)
- NEP-COM-2012-12-10 (Industrial Competition)
- NEP-ENE-2012-12-10 (Energy Economics)
- NEP-EUR-2012-12-10 (Microeconomic European Issues)
- NEP-IND-2012-12-10 (Industrial Organization)
- NEP-REG-2012-12-10 (Regulation)
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