An Integrated Approach to Model Redispatch and to Assess Potential Benefits from Market Splitting in Germany

EWL Working Paper No. 19/2013

49 Pages Posted: 25 Nov 2013 Last revised: 24 Apr 2014

See all articles by Katrin Trepper

Katrin Trepper

University of Duisburg-Essen

Michael Bucksteeg

University of Duisburg-Essen

Christoph Weber

University of Duisburg-Essen

Date Written: November 7, 2013

Abstract

Future congestion management is one of the major market design issues in the European electricity market. In the light of the sharp increase in redispatch measures seen within the last years, the importance of an efficient management of network congestion increases particularly in Germany. Against this background, we develop an integrated approach to model (re)dispatch for Germany in detail while considering interactions with neighbouring countries. Compared to 2011, our findings indicate a much more critical network situation in Germany for 2015. We identify increased RES production, resulting imports and exports, delays in grid extension and the impacts of the nuclear phase-out (leading to an amplified north-south congestion problem) as main drivers for the nearly doubling of redispatch volumes in 2015. We show that market splitting can potentially contribute to a secure grid operation and leads to a significant reduction of redispatch volumes (59%) according our model calculations. We state that market splitting can of course not be the 'one and only solution' but an interim approach to manage upcoming congestion in Germany in times when grid expansion has not yet been completed and that the implementation of market splitting can also serve as an alternative to grid extension within less congested areas.

Keywords: redispatch, congestion management, market design, market splitting

JEL Classification: Q40, Q47, Q49

Suggested Citation

Trepper, Katrin and Bucksteeg, Michael and Weber, Christoph, An Integrated Approach to Model Redispatch and to Assess Potential Benefits from Market Splitting in Germany (November 7, 2013). EWL Working Paper No. 19/2013, Available at SSRN: https://ssrn.com/abstract=2359328 or http://dx.doi.org/10.2139/ssrn.2359328

Katrin Trepper

University of Duisburg-Essen ( email )

Lotharstrasse 1
Duisburg, 47048
Germany

Michael Bucksteeg (Contact Author)

University of Duisburg-Essen ( email )

Universitätsstraße 2
Essen, 45141
Germany

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

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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