Market-based Redispatch May Result in Inefficient Dispatch

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Publication Details

Author(s): Grimm V, Martin A, Sölch C, Weibelzahl M, Zöttl G
Publication year: 2018
Language: English


Abstract

In this paper we analyze a uniform price electricity spot market that is
followed by redispatch in the case of network congestion. We assume
that the transmission system operator is incentivized to minimize
redispatch cost and compare a cost-based redispatch to a market-based
redispatch mechanism. For networks with at least three nodes we show
that in contrast to cost-based redispatch, in the case of market-based
redispatch the cost-minimizing allocation may not be short-run
efficient. As we demonstrate, the possibility of the transmission system
operator to reduce market-based redispatch cost at the expense of a
reduced welfare may be driven by the electricity supply side or the
electricity demand side. Based on these results, we propose a new hybrid
approach where the transmission system operator implements the
efficient (instead of the cost minimizing) dispatch and uses
market-based redispatch compensations.


FAU Authors / FAU Editors

Grimm, Veronika Prof. Dr.
Lehrstuhl für Volkswirtschaftslehre, insbesondere Wirtschaftstheorie
Martin, Alexander Prof. Dr.
Economics - Discrete Optimization - Mathematics (EDOM)
Sölch, Christian
Lehrstuhl für Volkswirtschaftslehre, insbesondere Wirtschaftstheorie
Weibelzahl, Martin
Economics - Discrete Optimization - Mathematics (EDOM)
Zöttl, Gregor Prof. Dr.
Professur für Volkswirtschaftslehre


Additional Organisation
Energie-Campus Nürnberg (EnCN)


How to cite

APA:
Grimm, V., Martin, A., Sölch, C., Weibelzahl, M., & Zöttl, G. (2018). Market-based Redispatch May Result in Inefficient Dispatch.

MLA:
Grimm, Veronika, et al. Market-based Redispatch May Result in Inefficient Dispatch. 2018.

BibTeX: 

Last updated on 2018-10-09 at 12:38