IDEAS home Printed from https://ideas.repec.org/a/eee/rensus/v67y2017icp892-898.html
   My bibliography  Save this article

The “German Paradox” in the balancing power markets

Author

Listed:
  • Ocker, Fabian
  • Ehrhart, Karl-Martin

Abstract

This paper provides answers to questions raised by Hirth and Ziegenhagen [1] regarding the “German paradox” in the balancing power markets. We show that in spite of the increasing energy production from variable renewable energy sources, there is no need for a higher demand of balancing power in Germany because adaptations in the energy market design were undertaken and Grid Control Cooperations led to immense efficiency savings. Additionally, we investigate the price developments in the German Secondary balancing power market. We find evidence that the suppliers coordinate on a price level which is (far) above the competitive level and that they orientate their power bids towards previous auction prices.

Suggested Citation

  • Ocker, Fabian & Ehrhart, Karl-Martin, 2017. "The “German Paradox” in the balancing power markets," Renewable and Sustainable Energy Reviews, Elsevier, vol. 67(C), pages 892-898.
    • Handle: RePEc:eee:rensus:v:67:y:2017:i:c:p:892-898
    DOI: 10.1016/j.rser.2016.09.040
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1364032116305330
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.rser.2016.09.040?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. Yuichiro Ito & Ichiro Muto & Yasutaka Takizuka, 2015. "Data Analysis for Monitoring Japan's Real Estate Market," Bank of Japan Review Series 15-E-2, Bank of Japan.
    2. Hirth, Lion & Ziegenhagen, Inka, 2015. "Balancing power and variable renewables: Three links," Renewable and Sustainable Energy Reviews, Elsevier, vol. 50(C), pages 1035-1051.
    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. Michał Narajewski, 2022. "Probabilistic Forecasting of German Electricity Imbalance Prices," Energies, MDPI, vol. 15(14), pages 1-17, July.
    2. Schillinger, Moritz, 2019. "Balancing Market Design and Opportunity Cost - The Swiss Case," Working papers 2019/14, Faculty of Business and Economics - University of Basel.
    3. Kühnlenz, Florian & Nardelli, Pedro H.J. & Karhinen, Santtu & Svento, Rauli, 2018. "Implementing flexible demand: Real-time price vs. market integration," Energy, Elsevier, vol. 149(C), pages 550-565.
    4. Teirilä, Juha, 2020. "The value of the nuclear power plant fleet in the German power market under the expansion of fluctuating renewables," Energy Policy, Elsevier, vol. 136(C).
    5. Pape, Christian, 2018. "The impact of intraday markets on the market value of flexibility — Decomposing effects on profile and the imbalance costs," Energy Economics, Elsevier, vol. 76(C), pages 186-201.
    6. Koch, Christopher & Hirth, Lion, 2019. "Short-term electricity trading for system balancing: An empirical analysis of the role of intraday trading in balancing Germany's electricity system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 113(C), pages 1-1.
    7. Gianfreda, Angelica & Parisio, Lucia & Pelagatti, Matteo, 2018. "A review of balancing costs in Italy before and after RES introduction," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 549-563.
    8. Joos, Michael & Staffell, Iain, 2018. "Short-term integration costs of variable renewable energy: Wind curtailment and balancing in Britain and Germany," Renewable and Sustainable Energy Reviews, Elsevier, vol. 86(C), pages 45-65.
    9. Frade, Pedro M.S. & Pereira, João Pedro & Santana, J.J.E. & Catalão, J.P.S., 2019. "Wind balancing costs in a power system with high wind penetration – Evidence from Portugal," Energy Policy, Elsevier, vol. 132(C), pages 702-713.
    10. Lauven, Lars-Peter & Geldermann, Jutta & Desideri, Umberto, 2019. "Estimating the revenue potential of flexible biogas plants in the power sector," Energy Policy, Elsevier, vol. 128(C), pages 402-410.

    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. Eicke, Anselm & Ruhnau, Oliver & Hirth, Lion, 2021. "Electricity balancing as a market equilibrium," EconStor Preprints 233852, ZBW - Leibniz Information Centre for Economics.
    2. Hugo Algarvio & Fernando Lopes & António Couto & Ana Estanqueiro, 2019. "Participation of wind power producers in day‐ahead and balancing markets: An overview and a simulation‐based study," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 8(5), September.
    3. Batalla-Bejerano, Joan & Costa-Campi, Maria Teresa & Trujillo-Baute, Elisa, 2016. "Collateral effects of liberalisation: Metering, losses, load profiles and cost settlement in Spain’s electricity system," Energy Policy, Elsevier, vol. 94(C), pages 421-431.
    4. Casimir Lorenz & Clemens Gerbaulet, 2017. "Wind Providing Balancing Reserves: An Application to the German Electricity System of 2025," Discussion Papers of DIW Berlin 1655, DIW Berlin, German Institute for Economic Research.
    5. Raul-Alexandru Szakal & Alexandru Doman & Sebastian Muntean, 2021. "Influence of the Reshaped Elbow on the Unsteady Pressure Field in a Simplified Geometry of the Draft Tube," Energies, MDPI, vol. 14(5), pages 1-21, March.
    6. Angelica, Gianfreda & Lucia, Parisio & Matteo, Pelagatti, 2017. "The RES-induced Switching Effect Across Fossil Fuels: An Analysis of the Italian Day-Ahead and Balancing Prices and Their Connected Costs," Working Papers 360, University of Milano-Bicocca, Department of Economics, revised 03 Feb 2017.
    7. Di Cosmo, Valeria & Malaguzzi Valeri, Laura, 2018. "Wind, storage, interconnection and the cost of electricity generation," Energy Economics, Elsevier, vol. 69(C), pages 1-18.
    8. De Vos, K. & Stevens, N. & Devolder, O. & Papavasiliou, A. & Hebb, B. & Matthys-Donnadieu, J., 2019. "Dynamic dimensioning approach for operating reserves: Proof of concept in Belgium," Energy Policy, Elsevier, vol. 124(C), pages 272-285.
    9. Poplavskaya, Ksenia & de Vries, Laurens, 2019. "Distributed energy resources and the organized balancing market: A symbiosis yet? Case of three European balancing markets," Energy Policy, Elsevier, vol. 126(C), pages 264-276.
    10. Gianfreda, Angelica & Ravazzolo, Francesco & Rossini, Luca, 2020. "Comparing the forecasting performances of linear models for electricity prices with high RES penetration," International Journal of Forecasting, Elsevier, vol. 36(3), pages 974-986.
    11. Pape, Christian, 2018. "The impact of intraday markets on the market value of flexibility — Decomposing effects on profile and the imbalance costs," Energy Economics, Elsevier, vol. 76(C), pages 186-201.
    12. Sinn, Hans-Werner, 2017. "Buffering volatility: A study on the limits of Germany's energy revolution," European Economic Review, Elsevier, vol. 99(C), pages 130-150.
    13. Giovanni Brusco & Alessandro Burgio & Daniele Menniti & Anna Pinnarelli & Nicola Sorrentino & Pasquale Vizza, 2017. "Quantification of Forecast Error Costs of Photovoltaic Prosumers in Italy," Energies, MDPI, vol. 10(11), pages 1-17, November.
    14. Zhao, Shihao & Li, Kang & Yang, Zhile & Xu, Xinzhi & Zhang, Ning, 2022. "A new power system active rescheduling method considering the dispatchable plug-in electric vehicles and intermittent renewable energies," Applied Energy, Elsevier, vol. 314(C).
    15. Roos, Aleksandra & Bolkesjø, Torjus Folsland, 2018. "Value of demand flexibility on spot and reserve electricity markets in future power system with increased shares of variable renewable energy," Energy, Elsevier, vol. 144(C), pages 207-217.
    16. Brijs, Tom & De Jonghe, Cedric & Hobbs, Benjamin F. & Belmans, Ronnie, 2017. "Interactions between the design of short-term electricity markets in the CWE region and power system flexibility," Applied Energy, Elsevier, vol. 195(C), pages 36-51.
    17. Coker, Phil J. & Bloomfield, Hannah C. & Drew, Daniel R. & Brayshaw, David J., 2020. "Interannual weather variability and the challenges for Great Britain’s electricity market design," Renewable Energy, Elsevier, vol. 150(C), pages 509-522.
    18. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    19. Schillinger, Moritz & Weigt, Hannes & Barry, Michael & Schumann, René, 2017. "Hydropower Operation in a Changing Market Environment A Swiss Case Study," Working papers 2017/19, Faculty of Business and Economics - University of Basel.
    20. Teirilä, Juha, 2020. "The value of the nuclear power plant fleet in the German power market under the expansion of fluctuating renewables," Energy Policy, Elsevier, vol. 136(C).

    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:rensus:v:67:y:2017:i:c:p:892-898. See general information about how to correct material in RePEc.

    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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/600126/description#description .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.