German Electricity Reserve Markets

Electricity Markets Working Paper No. EM-20

29 Pages Posted: 25 May 2008 Last revised: 22 Apr 2009

See all articles by Stefan Riedel

Stefan Riedel

Dresden University of Technology - Faculty of Economics and Business Management

Hannes Weigt

WWZ, Wirtschaftswissenschaftliche Fakultät der Universität Basel

Date Written: 2007

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.

Keywords: electricity, Germany, reserve market

JEL Classification: L94

Suggested Citation

Riedel, Stefan and Weigt, Hannes, German Electricity Reserve Markets (2007). Electricity Markets Working Paper No. EM-20, Available at SSRN: https://ssrn.com/abstract=1137282 or http://dx.doi.org/10.2139/ssrn.1137282

Stefan Riedel

Dresden University of Technology - Faculty of Economics and Business Management ( email )

Mommsenstrasse 13
Dresden, D-01062
Germany

Hannes Weigt (Contact Author)

WWZ, Wirtschaftswissenschaftliche Fakultät der Universität Basel ( email )

Basel, 4051
Switzerland

HOME PAGE: http://fonew.unibas.ch/

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