IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v94y2016icp446-452.html
   My bibliography  Save this article

A welfare analysis of electricity transmission planning in Germany

Author

Listed:
  • Kemfert, Claudia
  • Kunz, Friedrich
  • Rosellón, Juan

Abstract

We analyze the electricity transmission planning process in Germany (Netzentwicklungsplan), which separates transmission expansion decisions from generation dispatch. We employ an economic modeling approach to analyze two different network planning settings. In the first setting, there is no trade-off between transmission network development and generation dispatch, as is currently the case in Germany. A second setting alternatively allows for such a trade-off, and thus represents a welfare superior way of transmission network planning. Applications with the two model variants are carried out for the German electricity system in 2035. The results illustrate overinvestment in transmission capacity and decreased welfare associated with the Netzentwicklungsplan.

Suggested Citation

  • Kemfert, Claudia & Kunz, Friedrich & Rosellón, Juan, 2016. "A welfare analysis of electricity transmission planning in Germany," Energy Policy, Elsevier, vol. 94(C), pages 446-452.
  • Handle: RePEc:eee:enepol:v:94:y:2016:i:c:p:446-452
    DOI: 10.1016/j.enpol.2016.04.011
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421516301793
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.enpol.2016.04.011?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. William Hogan & Juan Rosellón & Ingo Vogelsang, 2010. "Toward a combined merchant-regulatory mechanism for electricity transmission expansion," Journal of Regulatory Economics, Springer, vol. 38(2), pages 113-143, October.
    2. Schroeder, Andreas & Oei, Pao-Yu & Sander, Aram & Hankel, Lisa & Laurisch, Lilian Charlotte, 2013. "The integration of renewable energies into the German transmission grid—A scenario comparison," Energy Policy, Elsevier, vol. 61(C), pages 140-150.
    3. Juan Rosellón & Hannes Weigt, 2011. "A Dynamic Incentive Mechanism for Transmission Expansion in Electricity Networks: Theory, Modeling, and Application," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 119-148.
    4. Steven Stoft, 2006. "Problems of Transmission Investment in a Deregulated Power Market," Chapters, in: François Lévêque (ed.), Competitive Electricity Markets and Sustainability, chapter 4, Edward Elgar Publishing.
    5. Kunz, Friedrich & Neuhoff, Karsten & Rosellón, Juan, 2016. "FTR allocations to ease transition to nodal pricing: An application to the German power system," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 176-185.
    6. Trepper, Katrin & Bucksteeg, Michael & Weber, Christoph, 2015. "Market splitting in Germany – New evidence from a three-stage numerical model of Europe," Energy Policy, Elsevier, vol. 87(C), pages 199-215.
    7. Sauma, Enzo E. & Oren, Shmuel S., 2009. "Do generation firms in restructured electricity markets have incentives to support social-welfare-improving transmission investments?," Energy Economics, Elsevier, vol. 31(5), pages 676-689, September.
    8. Enzo Sauma & Shmuel Oren, 2006. "Proactive planning and valuation of transmission investments in restructured electricity markets," Journal of Regulatory Economics, Springer, vol. 30(3), pages 358-387, November.
    9. van der Weijde, Adriaan Hendrik & Hobbs, Benjamin F., 2012. "The economics of planning electricity transmission to accommodate renewables: Using two-stage optimisation to evaluate flexibility and the cost of disregarding uncertainty," Energy Economics, Elsevier, vol. 34(6), pages 2089-2101.
    10. Friedrich Kunz, 2013. "Improving Congestion Management: How to Facilitate the Integration of Renewable Generation in Germany," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    11. Jonas Egerer & Clemens Gerbaulet & Richard Ihlenburg & Friedrich Kunz & Benjamin Reinhard & Christian von Hirschhausen & Alexander Weber & Jens Weibezahn, 2014. "Electricity Sector Data for Policy-Relevant Modeling: Data Documentation and Applications to the German and European Electricity Markets," Data Documentation 72, DIW Berlin, German Institute for Economic Research.
    12. Schill, Wolf-Peter & Egerer, Jonas & Rosellón, Juan, 2015. "Testing Regulatory Regimes for Power Transmission Expansion with Fluctuating Demand and Wind Generation," EconStor Open Access Articles, ZBW - Leibniz Information Centre for Economics, pages 1-28.
    13. Enzo Sauma & Shmuel Oren, 2006. "Proactive planning and valuation of transmission investments in restructured electricity markets," Journal of Regulatory Economics, Springer, vol. 30(3), pages 261-290, November.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Claudia Kemfert & Clemens Gerbaulet & Christian von Hirschhausen, 2016. "Stromnetze und Speichertechnologien für die Energiewende - eine Analyse mit Bezug zur Diskussion des EEG 2016: Gutachten im Auftrag der Hermann-Scheer-Stiftung," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, edition 0, volume 112, number pbk112.
    2. Zenón, Eric & Rosellón, Juan, 2017. "Optimal transmission planning under the Mexican new electricity market," Energy Policy, Elsevier, vol. 104(C), pages 349-360.
    3. Ambrosius, M. & Egerer, J. & Grimm, V. & Weijde, A.H. van der, 2020. "Uncertain bidding zone configurations: The role of expectations for transmission and generation capacity expansion," European Journal of Operational Research, Elsevier, vol. 285(1), pages 343-359.
    4. Roques, Fabien & Finon, Dominique, 2017. "Adapting electricity markets to decarbonisation and security of supply objectives: Toward a hybrid regime?," Energy Policy, Elsevier, vol. 105(C), pages 584-596.
    5. Croonenbroeck, Carsten & Palm, Marcel, 2020. "A spatio-temporal Durbin fixed effects IV-Model for ENTSO-E electricity flows analysis," Renewable Energy, Elsevier, vol. 148(C), pages 205-213.
    6. Ambrosius, Mirjam & Grimm, Veronika & Kleinert, Thomas & Liers, Frauke & Schmidt, Martin & Zöttl, Gregor, 2020. "Endogenous price zones and investment incentives in electricity markets: An application of multilevel optimization with graph partitioning," Energy Economics, Elsevier, vol. 92(C).
    7. Lang, Lukas Maximilian & Dallinger, Bettina & Lettner, Georg, 2020. "The meaning of flow-based market coupling on redispatch measures in Austria," Energy Policy, Elsevier, vol. 136(C).
    8. Costa-Campi, Maria Teresa & Davi-Arderius, Daniel & Trujillo-Baute, Elisa, 2020. "Locational impact and network costs of energy transition: Introducing geographical price signals for new renewable capacity," Energy Policy, Elsevier, vol. 142(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zenón, Eric & Rosellón, Juan, 2017. "Optimal transmission planning under the Mexican new electricity market," Energy Policy, Elsevier, vol. 104(C), pages 349-360.
    2. Ruderer, Dominik & Zöttl, Gregor, 2018. "Transmission pricing and investment incentives," Utilities Policy, Elsevier, vol. 55(C), pages 14-30.
    3. Claudia Kemfert & Friedrich Kunz & Juan Rosellón, 2015. "A Welfare Analysis of the Electricity Transmission Regulatory Regime in Germany," Discussion Papers of DIW Berlin 1492, DIW Berlin, German Institute for Economic Research.
    4. Gerbaulet, C. & Weber, A., 2018. "When regulators do not agree: Are merchant interconnectors an option? Insights from an analysis of options for network expansion in the Baltic Sea region," Energy Policy, Elsevier, vol. 117(C), pages 228-246.
    5. Ochoa, Camila & van Ackere, Ann, 2015. "Winners and losers of market coupling," Energy, Elsevier, vol. 80(C), pages 522-534.
    6. Ambrosius, M. & Egerer, J. & Grimm, V. & Weijde, A.H. van der, 2020. "Uncertain bidding zone configurations: The role of expectations for transmission and generation capacity expansion," European Journal of Operational Research, Elsevier, vol. 285(1), pages 343-359.
    7. Kunz, Friedrich, 2018. "Quo Vadis? (Un)scheduled electricity flows under market splitting and network extension in central Europe," Energy Policy, Elsevier, vol. 116(C), pages 198-209.
    8. Jonas Egerer, 2016. "Open Source Electricity Model for Germany (ELMOD-DE)," Data Documentation 83, DIW Berlin, German Institute for Economic Research.
    9. Kasina, Saamrat & Hobbs, Benjamin F., 2020. "The value of cooperation in interregional transmission planning: A noncooperative equilibrium model approach," European Journal of Operational Research, Elsevier, vol. 285(2), pages 740-752.
    10. Grimm, Veronika & Martin, Alexander & Schmidt, Martin & Weibelzahl, Martin & Zöttl, Gregor, 2016. "Transmission and generation investment in electricity markets: The effects of market splitting and network fee regimes," European Journal of Operational Research, Elsevier, vol. 254(2), pages 493-509.
    11. Siddiqui, Afzal S. & Tanaka, Makoto & Chen, Yihsu, 2019. "Sustainable transmission planning in imperfectly competitive electricity industries: Balancing economic and environmental outcomes," European Journal of Operational Research, Elsevier, vol. 275(1), pages 208-223.
    12. Chao, Hung-po & Wilson, Robert, 2020. "Coordination of electricity transmission and generation investments," Energy Economics, Elsevier, vol. 86(C).
    13. Camelo, Sergio & Papavasiliou, Anthony & de Castro, Luciano & Riascos, Álvaro & Oren, Shmuel, 2018. "A structural model to evaluate the transition from self-commitment to centralized unit commitment," Energy Economics, Elsevier, vol. 75(C), pages 560-572.
    14. Kunz, Friedrich & Neuhoff, Karsten & Rosellón, Juan, 2016. "FTR allocations to ease transition to nodal pricing: An application to the German power system," Energy Economics, Elsevier, vol. 60(C), pages 176-185.
    15. Urzúa, I.A. & Olmedo, J.C. & Sauma, E.E., 2016. "Impact of intermittent non-conventional renewable generation in the costs of the Chilean main power system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 810-821.
    16. Caballero, F. & Sauma, E. & Yanine, F., 2013. "Business optimal design of a grid-connected hybrid PV (photovoltaic)-wind energy system without energy storage for an Easter Island's block," Energy, Elsevier, vol. 61(C), pages 248-261.
    17. Grimm, Veronika & Martin, Alexander & Weibelzahl, Martin & Zöttl, Gregor, 2014. "Transmission and Generation Investment in Electricity Markets: The Effects of Market Splitting and Network Fee Regimes," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 460, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    18. Munoz, Francisco D. & van der Weijde, Adriaan Hendrik & Hobbs, Benjamin F. & Watson, Jean-Paul, 2017. "Does risk aversion affect transmission and generation planning? A Western North America case study," Energy Economics, Elsevier, vol. 64(C), pages 213-225.
    19. Francisco Munoz & Enzo Sauma & Benjamin Hobbs, 2013. "Approximations in power transmission planning: implications for the cost and performance of renewable portfolio standards," Journal of Regulatory Economics, Springer, vol. 43(3), pages 305-338, June.
    20. Janda, Karel & Málek, Jan & Rečka, Lukáš, 2017. "Influence of renewable energy sources on transmission networks in Central Europe," Energy Policy, Elsevier, vol. 108(C), pages 524-537.

    More about this item

    Keywords

    Transmission planning; Nodal prices; Congestion management; Electricity; Germany;
    All these keywords.

    JEL classification:

    • L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:94:y:2016:i:c:p:446-452. 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: . General contact details of provider: http://www.elsevier.com/locate/enpol .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Nithya Sathishkumar (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.