The “German Paradox” in the balancing power markets

Fabian Ocker and Karl-Martin Ehrhart

Renewable and Sustainable Energy Reviews, 2017, vol. 67, issue C, 892-898

Abstract: This paper provides answers to questions raised by Hirth and Ziegenhagen [1] regarding the “German paradox” in the balancing power markets. We show that in spite of the increasing energy production from variable renewable energy sources, there is no need for a higher demand of balancing power in Germany because adaptations in the energy market design were undertaken and Grid Control Cooperations led to immense efficiency savings. Additionally, we investigate the price developments in the German Secondary balancing power market. We find evidence that the suppliers coordinate on a price level which is (far) above the competitive level and that they orientate their power bids towards previous auction prices.

Keywords: Balancing power; Bidding strategy; Collusive behavior; Market design; Power reserve (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:rensus:v:67:y:2017:i:c:p:892-898

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DOI: 10.1016/j.rser.2016.09.040

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