Control Power and Variable Renewables: A Glimpse at German Data

36 Pages Posted: 6 Jun 2013

See all articles by Lion Hirth

Lion Hirth

Neon Neue Energieökonomik GmbH; Hertie School of Governance

Inka Ziegenhagen

Vattenfall GmbH

Date Written: June 5, 2013

Abstract

Control power (regulating power, balancing power) is used to quickly restore the supply-demand balance in power systems. Variable renewable energy sources (VRE) such as wind and solar power are often thought to increase the reserve requirement significantly. This paper provides a comprehensive overview of balancing systems in Europe, discusses the role of VRE, and presents empirical market data from Germany. Despite German VRE capacity doubled during the last five years and has surpassed 70% of peak load, contracted control power decreased by 20%, and procurement cost fell by 50%. Today, control power adds only 0.4% to household electricity prices. Nevertheless, we identify several sources of inefficiency in control power markets and imbalance settlement systems and propose a number of policy changes to stimulate the participation of VRE in control provision and to improve the incentives to forecast accurately.

Keywords: Balancing Power, Control Power, Variable Renewables, Wind Power, Solar Power, Market Design

JEL Classification: Q42, Q48, L94, D62

Suggested Citation

Hirth, Lion and Ziegenhagen, Inka, Control Power and Variable Renewables: A Glimpse at German Data (June 5, 2013). FEEM Working Paper No. 46.2013, Available at SSRN: https://ssrn.com/abstract=2274697 or http://dx.doi.org/10.2139/ssrn.2274697

Lion Hirth (Contact Author)

Neon Neue Energieökonomik GmbH ( email )

Karl-Marx-Platz 12
12043
Berlin, 12043
Germany

HOME PAGE: http://www.neon-energie.de

Hertie School of Governance ( email )

Friedrichstraße 180
Berlin, 10117
Germany

Inka Ziegenhagen

Vattenfall GmbH ( email )

Berlin
Germany

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
166
Abstract Views
1,091
rank
224,457
PlumX Metrics