Regional components for renewable energy remuneration

Expert report on behalf of the Monopolies Commission in preparation for the 77th Special Report "Energie 2017" of the Monopolies Commission

In a report on behalf of the Monopolies Commission, the EnCN electricity market model is used to analyze the long-term effects of the regulatory framework of the electricity market on investment and production incentives in network and generation capacities. The focus is on various scenarios for the regional expansion of renewable energy plants. The study shows that consumption-orientated, decentralized locations lead to a higher system efficiency in comparison with the currently forecasted locations, which are primarily geared to the optimal output of the plants. Regional components in renewable energy remuneration can enable consumption-orientated locations.

    • What impact does a regional component in RE remuneration have on RE expansion?

    • How does this affect the welfare of the overall system and investment in network and conventional generation?

    • Numerical analysis in a multi-level electricity market model

    • Modelling of line expansion, the spot market with generation expansion and the necessary congestion management adjustments with redispatch

    • Calibrated with data for the German electricity market for the year 2035

    • In the system optimum, renewable energy plants would be expanded much more closely to the load than under the current regulatory framework.

    • A regional component that incentivizes the same expansion can significantly reduce grid expansion and increase welfare.

    Research team

    Prof. Dr. Veronika Grimm

    FAU Erlangen-Nürnberg / Chair of Economic Theory

    Christian Sölch

    FAU Erlangen-Nürnberg / Professorship of Economics (Industrial Organization and Energy Markets)

    Prof. Dr. Gregor Zöttl

    FAU Erlangen-Nürnberg / Professorship of Economics (Industrial Organization and Energy Markets)

    Further reference projects