Wind Providing Balancing Reserves: An Application to the German Electricity System of 2025
This paper analyzes the influence of wind turbines as new participants on prices and allocation within balancing markets. We introduce the cost-minimizing electricity sector model ELMOD-MIP, that includes detailed unit-commitment constraints, complex combined heat and power constraints, and minimum bid sizes for balancing capacity reservation. The model also features a novel approach of modeling balancing reservation by considering possible activation costs already during the reservation phase, mimicking the activation anticipation of market participants. The model includes the spot and balancing market of Germany and is applied to scenarios for 2013 and 2025. The results for 2025 show, in comparison to 2013, a price increase for positive and negative reserves, in case no new participants enter the market. With the participation of wind turbines the cost for balancing provision is reduced by 40%, but above 2013 values. The relative cost savings from wind participation are higher for negative reserve provision than positive reserve provision, as wind turbines can use their full capacity if not activated and do not have to be curtailed ex ante. The participation of wind turbines especially reduces the occurrence of peak prices for positive and negative reserves in 2025. This reduction effect occurs even with a relatively low share where wind turbines participate with only five percent of their capacity. Therefore, further fostering the process of allowing wind turbines to participate in the German reserve market seems favorable.
|Date of creation:||2017|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
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.:
- Sebastian Just, 2011. "Appropriate contract durations in the German markets for on-line reserve capacity," Journal of Regulatory Economics, Springer, vol. 39(2), pages 194-220, April.
- Andreas Schröder & Friedrich Kunz & Jan Meiss & Roman Mendelevitch & Christian von Hirschhausen, 2013. "Current and Prospective Costs of Electricity Generation until 2050," Data Documentation 68, DIW Berlin, German Institute for Economic Research.
- Heim, Sven & Götz, Georg, 2013.
"Do pay-as-bid auctions favor collusion? Evidence from Germany's market for reserve power,"
ZEW Discussion Papers
13-035, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
- Sven Heim & Georg Götz, 2013. "Do pay-as-bid auctions favor collusion? - Evidence from Germany’s market for reserve power," MAGKS Papers on Economics 201324, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
- repec:eee:rensus:v:79:y:2017:i:c:p:1518-1534 is not listed on IDEAS
- Mauritzen, Johannes, 2013. "Now or Later? Trading wind power closer to real-time and how poorly designed subsidies lead to higher balancing costs," Discussion Papers 2013/1, Department of Business and Management Science, Norwegian School of Economics.
- Mauritzen, Johannes, 2013. "Now or Later? Trading Wind Power Closer to Real-time and How Poorly Designed Subsidies Lead to Higher Balancing Costs," Working Paper Series 969, Research Institute of Industrial Economics.
- 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, vol. 0(Number 2).
- Haucap, Justus & Heimeshoff, Ulrich & Jovanovic, Dragan, 2012. "Competition in Germany's minute reserve power market: An econometric analysis," DICE Discussion Papers 75, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
- 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.
- Koliou, Elta & Eid, Cherrelle & Chaves-Ávila, José Pablo & Hakvoort, Rudi A., 2014. "Demand response in liberalized electricity markets: Analysis of aggregated load participation in the German balancing mechanism," Energy, Elsevier, vol. 71(C), pages 245-254.
- Böttger, Diana & Götz, Mario & Theofilidi, Myrto & Bruckner, Thomas, 2015. "Control power provision with power-to-heat plants in systems with high shares of renewable energy sources – An illustrative analysis for Germany based on the use of electric boilers in district heatin," Energy, Elsevier, vol. 82(C), pages 157-167.
- Zerrahn, Alexander & Schill, Wolf-Peter, 2017. "Long-run power storage requirements for high shares of renewables: review and a new model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 1518-1534.
- Alexander Zerrahn & Wolf-Peter Schill, 2015. "A Greenfield Model to Evaluate Long-Run Power Storage Requirements for High Shares of Renewables," Discussion Papers of DIW Berlin 1457, DIW Berlin, German Institute for Economic Research.
- 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.
- Knaut, Andreas & Obermüller, Frank & Weiser, Florian, 2017. "Tender Frequency and Market Concentration in Balancing Power Markets," EWI Working Papers 2017-4, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
- Johannes Mauritzen, 2015. "Now or Later? Trading Wind Power Closer to Real Time And How Poorly Designed Subsidies Lead to Higher Balancing Costs," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
- Hirth, Lion & Ziegenhagen, Inka, 2015. "Balancing power and variable renewables: Three links," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1035-1051.
- Chao, Hung-Po & Wilson, Robert, 2002. "Multi-dimensional Procurement Auctions for Power Reserves: Robust Incentive-Compatible Scoring and Settlement Rules," Journal of Regulatory Economics, Springer, vol. 22(2), pages 161-183, September. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp1655. 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: (Bibliothek)
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.