The Impact of an increasing share of RES-E on the Conventional Power Market — The Example of Germany

Abstract

The intermittency of wind power has a decreasing effect on day-ahead spot prices. Data from Germany illustrate this effect and explain the underlying relationships. This short-term price effect leads to an adaptation process in the conventional generation capacity mix. In the long-run, a higher peak load plant share is required to cope with the increasing volatility of the residual demand. The result is an adapted merit-order. This merit-order intersects with an increasingly volatile residual demand curve and leads to a higher price volatility in the power market, which is going to trigger further adaptations. Therefore this article concludes with a list of open research questions, which can be derived from the illustrated relationship. These research questions should be investigated as soon as possible in order to induce the required adaptations in time.Die unstete Windenergieeinspeisung hat einen preissenkenden Effekt am dayahead Großhandel. Daten aus Deutschland zeigen diesen Effekt und erklären die zugrunde liegenden Zusammenhänge. Dieser Preiseffekt gilt in der kurzen Frist und führt zu einem Anpassungsprozess im konventionellen Kraftwerkspark. Um die zunehmend volatile residuale Nachrage zu bedienen, ist in der langen Frist ein höherer Anteil an Spitzenlastkraftwerken nötig, was eine Veränderung der Merit-Order zur Folge hat. Wenn diese angepasste Merit-Order auf eine zunehmend volatile residuale Nachfrage trifft, führt dies zu einem Anstieg der Preisvolatilität. Der zukünftige Strommarkt zeichnet sich folglich durch eine höhere Preisvolatilität aus, was weitere Anpassungsprozesse nach sich zieht. Der Artikel schließt daher mit einer Auflistung offener Forschungsfragen, die sich aus dem dargestellten Zusammenhang ableiten und schnellstmöglich untersucht werden sollten, um die benötigten Anpassungen einleiten zu können.

On the Impact of Wind Feed-in and Interconnections on Electricity Price in Germany

“…Weigt (2008) concludes that the price was on average 10 €/MWh lower. Nicolosi and Fürsch (2009) confirm that in the short run, wind power feed-in reduces prices whereas in the long run, wind power affects conventional capacity, which could eventually be substituted. For Denmark, Munksgaard and Morthorst (2008) conclude that if there is little or no wind (<400MW), prices can increase up to around 80 €/MWh (600 DKK/MWh), whilst with strong wind (>1500MW) spot prices can be brought down to around 34 €/MWh (250 DKK/MWh).…”

Integration of intermittent renewable power supply using grid-connected vehicles – A 2030 case study for California and Germany

“…Hence, prices are low in hours with high renewable power supply or a low residual load. This merit-order effect [35], [36], [37] of RES-E in a uniform price auction is used to send a price-based control signal to the PEVs.…”

Contributions of flexible power generation from biomass to a secure and cost-effective electricity supply—a review of potentials, incentives and obstacles in Germany

“…storage systems) [18]. However, such an increase in price variance requires a reduction of excess capacities of non-flexible conventional power plants [71]. Furthermore, bioelectricity plant operators who participate in direct marketing can generate additional revenues in balancing markets.…”