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Improving Congestion Management: How to Facilitate the Integration of Renewable Generation in Germany

Friedrich Kunz

Year: 2013
Volume: Volume 34
Number: Number 4
DOI: 10.5547/01956574.34.4.4
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In this paper the German congestion management regime is analyzed and future congestion management costs are assessed given a higher share of intermittent renewable generation. In this context, cost-based re-dispatching of power plants and technical flexibility through topology optimization are considered as market-based and technical congestion management methods. To replicate the current market regime in Germany a two-step procedure is chosen consisting of a transactional spot market model and a congestion management model. This uniform pricing model is compared to a nodal pricing regime. The results show that currently congestion can mainly be managed by re-dispatching power plants and optimizing the network topology. However, congestion management costs tend to increase significantly in future years if the developments of transmission as well as generation infrastructure diverge. It is concluded that there is a need for improving the current congestion management regime to achieve an efficient long-term development of the German electricity system.

Coordinating Cross-Country Congestion Management: Evidence from Central Europe

Friedrich Kunz and Alexander Zerrahn

Year: 2016
Volume: Volume 37
Number: Sustainable Infrastructure Development and Cross-Border Coordination
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We employ a detailed two-stage model to simulate the operation of the Central Eastern European electricity market and network. Implementing different cases of coordination in congestion management between national transmission system operators, numerical results show the beneficial impact of closer cooperation. Specific steps comprise the sharing of network and dispatch information, cross-border counter-trading, and multilateral redispatch in a flow-based congestion management framework. Efficiency gains are accompanied by distributional effects. Closer economic cooperation becomes especially relevant against the background of changing spatial generation patterns, deeper international integration of national systems, and spillovers of national developments to adjacent systems.

Introduction of Nodal Pricing into the new Mexican Electricity Market through FTR Allocations

Friedrich Kunz, Juan Rosellón, and Claudia Kemfert

Year: 2017
Volume: Volume 38
Number: KAPSARC Special Issue
DOI: 10.5547/01956574.38.SI1.fkun
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The change from a subsidized zonal pricing system to a full nodal pricing regime in the new Mexican electricity market could improve the efficiency of electricity system operation. However, resulting price modifications might also swing surplus across producers and consumers. In this paper, we calculate nodal prices for the Mexican power system and further analyze how allocations of financial transmission rights (FTRs) can be used to mitigate resulting distributional effects. The share of FTRs to be allocated to different generation plants and loads is studied as a second step of an electricity tariff subsidy reform agenda that includes, as a first step, the change to nodal pricing and, as a third step, the reformulation of actual regressive subsidies in a progressive way. We test our model in a realistic nodal price setting, based on an hourly modeling of the Mexican power system.

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