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German Electricity Reserve Markets

Author

Listed:
  • Riedel, Stefan
  • Weigt, Hannes

Abstract

This paper analyzes the functioning of the markets for electricity reserves in Germany. We provide an overview of the technical requirements and the market design and structure of the primary, secondary and tertiary reserve markets, and then look at developments following the introduction of market-based reserve management. We assess the dependence of the minute reserve market by conducting a correlation analysis. The results indicate an increasing correlation among Germany’s four local markets as well as a relationship to wholesale market outcomes. We test the competitiveness of the reserve market by estimating the average income a peak load supplier can obtain by bidding on the reserve market.

Suggested Citation

  • Riedel, Stefan & Weigt, Hannes, 2007. "German Electricity Reserve Markets," MPRA Paper 65664, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65664
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    File URL: https://mpra.ub.uni-muenchen.de/65664/1/wp_em_20_riedel_weigt_Germany_reserve_markets.pdf
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    References listed on IDEAS

    as
    1. Kahn, Alfred E. & Cramton, Peter C. & Porter, Robert H. & Tabors, Richard D., 2001. "Uniform Pricing or Pay-as-Bid Pricing: A Dilemma for California and Beyond," The Electricity Journal, Elsevier, vol. 14(6), pages 70-79, July.
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    Cited by:

    1. Wang, Peng & Zareipour, Hamidreza & Rosehart, William D., 2011. "Characteristics of the prices of operating reserves and regulation services in competitive electricity markets," Energy Policy, Elsevier, vol. 39(6), pages 3210-3221, June.
    2. 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).
    3. Möller, Christoph & Rachev, Svetlozar T. & Fabozzi, Frank J., 2011. "Balancing energy strategies in electricity portfolio management," Energy Economics, Elsevier, vol. 33(1), pages 2-11, January.
    4. Farahmand, H. & Doorman, G.L., 2012. "Balancing market integration in the Northern European continent," Applied Energy, Elsevier, vol. 96(C), pages 316-326.
    5. Schmidt, Johannes & Eisel, Matthias & Kolbe, Lutz M., 2014. "Assessing the potential of different charging strategies for electric vehicle fleets in closed transport systems," Energy Policy, Elsevier, vol. 74(C), pages 179-189.
    6. Feuerriegel, Stefan & Neumann, Dirk, 2016. "Integration scenarios of Demand Response into electricity markets: Load shifting, financial savings and policy implications," Energy Policy, Elsevier, vol. 96(C), pages 231-240.
    7. Angenendt, Nicole & Growitsch, Christian & Nepal, Rabindra & Müller, Christine, 2008. "Effizienz und Stabilität des Stromgroßhandelsmarktes in Deutschland: Analyse und wirtschafts-politische Implikationen," WIK Discussion Papers 317, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    8. Growitsch, Christian & Höffler, Felix & Wissner, Matthias, 2010. "Marktmachtanalyse für den deutschen Regelenergiemarkt," WIK Discussion Papers 337, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    9. Tveten, Åsa Grytli & Bolkesjø, Torjus Folsland & Martinsen, Thomas & Hvarnes, Håvard, 2013. "Solar feed-in tariffs and the merit order effect: A study of the German electricity market," Energy Policy, Elsevier, vol. 61(C), pages 761-770.
    10. van der Veen, Reinier A.C. & Hakvoort, Rudi A., 2016. "The electricity balancing market: Exploring the design challenge," Utilities Policy, Elsevier, vol. 43(PB), pages 186-194.
    11. Growitsch, Christian & Müller, Gernot & Rammerstorfer, Margarethe & Weber, Christoph, 2007. "Determinanten der Preisentwicklung auf dem deutschen Minutenreservemarkt," WIK Discussion Papers 300, WIK Wissenschaftliches Institut für Infrastruktur und Kommunikationsdienste GmbH.
    12. Rammerstorfer, Margarethe & Wagner, Christian, 2009. "Reforming minute reserve policy in Germany: A step towards efficient markets?," Energy Policy, Elsevier, vol. 37(9), pages 3513-3519, September.

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    More about this item

    Keywords

    electricity; Germany; reserve market;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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