Energy Markets and Sector Coupling
The sustainable transformation to a climate-neutral energy system leads to a stronger market integration for different energy carriers. The research focus in “Energy Markets and Sector Coupling” is on the further development of market design to create an efficient framework for an increasing number of different market participants. Particular challenges are the harmonization of market incentives for centralized and decentralized developments, the coordination of infrastructure planning in coupled energy markets, and the consideration of uncertainty and risk aversion of investment decisions.
| Head of research area | ||
 |
||
| Dr. Jonas Egerer | ||
| Research associates | ||||
 |
 |
 |
||
| Lukas Maximilian Lang, M.Sc. | Ulrike Pfefferer, M.Sc. | Johannes Wirth, M.Sc. | ||
| Student assistants | ||
| Sebastian Botsch | Ali Taghizadeh | |
The paper sheds light on the tremendous challenges ahead when it comes to reaching the targets for the market ramp-up of renewable hydrogen and presents the authors’ view of how we can come closer to achieving them. With vast volumes of private investments urgently required, the authors advocate that the H2Global instrument would serve best to stimulate the market development and create a catalytic effect, create market liquidity and avoid windfall effects, and phase out public support soon.
The energy crisis is forcing Germany and other EU countries to reconsider and, if necessary, adjust energy policy decisions. New perspectives envisage a rapid expansion of renewable energies in the next few years. In the short term, there are considerations in Germany to reactivate coal-fired power plants from the reserve and to revise decisions to decommission coal-fired and nuclear power plants in the coming years. This brief study analyzes the price effects for the years 2024 and 2027 to shed light on both the short-term challenges and the medium-term prospects.
The Russian attack on Ukraine and the German energy industry’s dependence on Russian gas are currently leading to a very tight supply situation, which could worsen in the coming winter. In the medium term, too, the import price for natural gas is likely to be signifi cantly above historical levels as Europe becomes independent of Russian gas. These developments call for a reassessment of German energy policy, including for the energy transition in the power sector.
- Egerer, J., Grimm, V., Niazmand, K., & Runge, P. (2023). The economics of global green ammonia trade – “Shipping Australian wind and sunshine to Germany”. Applied Energy, 334(120662). https://doi.org/10.1016/j.apenergy.2023.120662
- Ambrosius, M., Egerer, J., Grimm, V., & van der Weijde, A.H. (2022). Risk aversion in multilevel electricity market models with different congestion pricing regimes. Energy Economics, 105, 105701. https://doi.org/10.1016/j.eneco.2021.105701
- Egerer, J., Grimm, V., Grübel, J., & Zöttl, G. (2022). Long-run market equilibria in coupled energy sectors: A study of uniqueness. European Journal of Operational Research, 303(3), 1335-1354. https://doi.org/10.1016/j.ejor.2022.03.028
- Egerer, J., Grimm, V., Hilpert, J., Holzhammer, U., Hümmer, B., Lang, L.,... Pfefferer, U. (2022). Das Smart Market-Konzept als marktbasiertes Element im deutschen Engpassmanagement. Energiewirtschaftliche Tagesfragen : et ; Zeitschrift für Energiewirtschaft, Recht, Technik und Umwelt, 72(4), 53 - 56.
- Egerer, J., Grimm, V., Lang, L., & Pfefferer, U. (2022). Kohleausstieg 2030 unter neuen Vorzeichen. Wirtschaftsdienst, 102(8), 600-608. https://doi.org/10.1007/s10273-022-3260-y
- Egerer, J., Grimm, V., Lang, L., Pfefferer, U., & Sölch, C. (2022). Mobilisierung von Erzeugungskapazitäten auf dem deutschen Strommarkt. Wirtschaftsdienst, 102(11), 846–854. https://doi.org/10.1007/s10273-022-3310-5
- Egerer, J., Grimm, V., Kleinert, T., Schmidt, M., & Zöttl, G. (2021). The Impact of Neighboring Markets on Renewable Locations, Transmission Expansion, and Generation Investment. European Journal of Operational Research, 292(2), 696 - 713. https://doi.org/10.1016/j.ejor.2020.10.055
- Ambrosius, M., Egerer, J., Grimm, V., & van der Weijde, A.H. (2020). Uncertain bidding zone configurations: The role of expectations for transmission and generation capacity expansion. European Journal of Operational Research, 285(1), 343 - 359. https://doi.org/10.1016/j.ejor.2020.01.024
- Lang, L., Dallinger, B., & Lettner, G. (2020). The meaning of flow-based market coupling on redispatch measures in Austria. Energy Policy, 136. https://dx.doi.org/10.1016/j.enpol.2019.111061
- Joint project: EOM-Plus – Analysis of the short and medium-term effects of market-based bottleneck instruments as a regional and temporary supplement to the existing energy-only electricity market design, sub-project: Transmission system level (2019-2023)
- SchöllerFellowship „Marktdesign von Strom- und Wasserstoffmärkten in mehrstufigen Energiemarktmodellen“ (2021-2023)
- Energie Campus Nürnberg (EnCN): Research area „Energy Market Design“ (2017-2021)
- German Council of Economic Experts
The German Council of Economic Experts is an academic body that advises on economic policy issues. Set up by law in 1963, it is mandated with the task of providing an impartial expert view in the form of periodic assessments of macroeconomic developments in Germany, thus helping economic policymakers and the general public to make informed decisions. The Council is fully independent in its advisory role and operates in a transparent manner. It describes the current economic situation and its likely future development, highlighting any adverse trends and possible ways of averting or mitigating them. To this end it discusses various indicators of economic output, quality of life, sustainability, and politically defined targets. It also analyses the progress, opportunities and risks of current economic policies and identifies potentially conflicting objectives. The Council’s reports and assessments form a key part of the economic policy debate in Germany and have significantly influenced the political decision-making process.