Wind power integration and power system flexibility-An empirical analysis of extreme events in Germany under the new negative price regime
In this article, the flexibility of the German power market with respect to the integration of an increasing share of electricity from renewable energy sources was analysed. Flexibility limiting system components, which cause negative prices, are explained and illustrated for the German market. The decision of the European Energy Exchange in Leipzig to allow negative price bids is then explained. The empirical data illustrate the flexibility of conventional generating capacities in Germany from October 2008 to December 2009. Of the 86Â h of negative spot prices, 19Â h were significantly negative, with prices of at least -100Â [euro]/MWh. These extreme hours were analysed in greater detail by the examination of different system components. Thereby, load, wind power infeed and conventional generation by fuel type were observed, as well as the market for negative tertiary reserve, as indicators for market tightness. Although the market situations were found to be severe, under the current conditions, it could have been much worse. In order to enable the market to clear at all times, policy recommendations are provided and long-run implications of an increasing RES-E share on the conventional generation capacity are discussed. The article concludes with an outlook on additional power system flexibility options.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard J. Green, 2008. "Electricity Wholesale Markets: Designs Now and in a Low-carbon Future," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 95-124.
- Joskow, Paul L., 2008. "Capacity payments in imperfect electricity markets: Need and design," Utilities Policy, Elsevier, vol. 16(3), pages 159-170, September.
- Brunekreeft, Gert & Neuhoff, Karsten & Newbery, David, 2005.
"Electricity transmission: An overview of the current debate,"
Elsevier, vol. 13(2), pages 73-93, June.
- 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.
- Batlle, Carlos & Pérez-Arriaga, Ignacio J., 2008. "Design criteria for implementing a capacity mechanism in deregulated electricity markets," Utilities Policy, Elsevier, vol. 16(3), pages 184-193, September.
- Just, Sebastian & Weber, Christoph, 2008. "Pricing of reserves: Valuing system reserve capacity against spot prices in electricity markets," Energy Economics, Elsevier, vol. 30(6), pages 3198-3221, November.
- Sovacool, Benjamin K. & Hirsh, Richard F., 2009. "Beyond batteries: An examination of the benefits and barriers to plug-in hybrid electric vehicles (PHEVs) and a vehicle-to-grid (V2G) transition," Energy Policy, Elsevier, vol. 37(3), pages 1095-1103, March.
- Peter Cramton, 2003.
"Competitive Bidding Behavior in Uniform-Price Auction Markets,"
Papers of Peter Cramton
03ferc1, University of Maryland, Department of Economics - Peter Cramton, revised 2003.
- Peter Cramton, 2004. "Competitive Bidding Behavior in Uniform-Price Auction Markets," Papers of Peter Cramton 04hicss, University of Maryland, Department of Economics - Peter Cramton, revised 2004.
- Weber, Christoph, 2010. "Adequate intraday market design to enable the integration of wind energy into the European power systems," Energy Policy, Elsevier, vol. 38(7), pages 3155-3163, July.
- Lise, Wietze & Hobbs, Benjamin F. & Hers, Sebastiaan, 2008. "Market power in the European electricity market--The impacts of dry weather and additional transmission capacity," Energy Policy, Elsevier, vol. 36(4), pages 1331-1343, April.
- Sensfuß, Frank & Ragwitz, Mario & Genoese, Massimo, 2008. "The merit-order effect: A detailed analysis of the price effect of renewable electricity generation on spot market prices in Germany," Energy Policy, Elsevier, vol. 36(8), pages 3076-3084, August.
- Roques, Fabien A., 2008.
"Market design for generation adequacy: Healing causes rather than symptoms,"
Elsevier, vol. 16(3), pages 171-183, September.
- Roques, F.A., 2008. "Market Design for Generation Adequacy: Healing Causes rather than Symptoms," Cambridge Working Papers in Economics 0821, Faculty of Economics, University of Cambridge.
- Cramton, Peter & Stoft, Steven, 2008.
"Forward reliability markets: Less risk, less market power, more efficiency,"
Elsevier, vol. 16(3), pages 194-201, September.
- Peter Cramton & Steven Stoft, 2008. "Forward Reliability Markets: Less Risk, Less Market Power, More Efficiency," Papers of Peter Cramton 08frm, University of Maryland, Department of Economics - Peter Cramton, revised 2008.
- Strbac, Goran, 2008. "Demand side management: Benefits and challenges," Energy Policy, Elsevier, vol. 36(12), pages 4419-4426, December.
- Weigt, Hannes & Hirschhausen, Christian von, 2008. "Price formation and market power in the German wholesale electricity market in 2006," Energy Policy, Elsevier, vol. 36(11), pages 4227-4234, November.
When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:38:y:2010:i:11:p:7257-7268. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.