Impacts of RES-Generation and Demand Pattern on Net Transfer Capacity: Implications for Effectiveness of Market Splitting in Germany

EWL Working Paper No. 02/2014

35 Pages Posted: 24 Jun 2014

See all articles by Michael Bucksteeg

Michael Bucksteeg

FernUniversitat in Hagen

Katrin Trepper

University of Duisburg-Essen

Christoph Weber

University of Duisburg-Essen

Date Written: May 1, 2014

Abstract

For the further development of an integrated European electricity market, congestion management mechanisms are one of the major market design issues. Against the background of increasing generation from RES and resulting congestions, an efficient management of network congestions is gaining importance especially in Germany. Introducing nodal pricing as the first best mechanism is not considered to be realistic for Germany in the nearer future. Yet the splitting of the German electricity market into several market zones will also improve congestion management. A key issue in the so-called market splitting is the determination of the net transfer capacity (NTC) between the market zones as it determines the effectiveness of market splitting as congestion management mechanism. We therefore develop an integrated approach to incorporate the effects of renewables feed-in, load pattern and cross border flows on NTCs. We conclude that the NTCs strongly depend on RES infeed and that this effect has to be considered when modelling alternative congestion management mechanisms like market splitting.

Keywords: net transfer capacity, congestion management, market splitting

JEL Classification: Q40, Q47, Q49

Suggested Citation

Bucksteeg, Michael and Trepper, Katrin and Weber, Christoph, Impacts of RES-Generation and Demand Pattern on Net Transfer Capacity: Implications for Effectiveness of Market Splitting in Germany (May 1, 2014). EWL Working Paper No. 02/2014, Available at SSRN: https://ssrn.com/abstract=2457795 or http://dx.doi.org/10.2139/ssrn.2457795

Michael Bucksteeg (Contact Author)

FernUniversitat in Hagen ( email )

Universit¨atsstraße 41
Hagen, 58097
Germany

Katrin Trepper

University of Duisburg-Essen ( email )

Lotharstrasse 1
Duisburg, 47048
Germany

Christoph Weber

University of Duisburg-Essen ( email )

Universitätsstraße 2
Essen, 45141
Germany

HOME PAGE: http://www.ewl.wiwi.uni-due.de

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