Efficient pricing for European electricity networks - The theory of nodal pricing applied to feeding-in wind in Germany
This paper applies nodal pricing as an economic approach to efficient use of electricity networks utilization for the fairly large German grid. We combine a straightforward welfare maximization with the technical specificities of electricity flows on a realistically large network. The nodal pricing model is applied in order to analyze the impact of extended German wind power production on the power grid. The paper shows that economic modeling, taking into account physical and technical constraints, makes important contributions to the assessment and optimization of system configuration and operation.
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"Space and Time: Wind in an Investment Planning Model,"
Cambridge Working Papers in Economics
0620, Faculty of Economics, University of Cambridge.
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- Richard Green, 2007. "Nodal pricing of electricity: how much does it cost to get it wrong?," Journal of Regulatory Economics, Springer, vol. 31(2), pages 125-149, April.
- Perez-Arriaga, Ignacio J. & Olmos, Luis, 2005. "A plausible congestion management scheme for the internal electricity market of the European Union," Utilities Policy, Elsevier, vol. 13(2), pages 117-134, June.
- J. Boucher & Y. Smeers, 2002. "Towards a common European Electricity market paths in the right directionâ€¦ still far from an effective design," Competition and Regulation in Network Industries, Intersentia, vol. 3(4), pages 375-425, September.
- Hogan, William W., 2003. "Transmission Market Design," Working Paper Series rwp03-040, Harvard University, John F. Kennedy School of Government.
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