Grimm V, Rückel B, Sölch C, Zöttl G (2019)
Publication Language: English
Publication Status: Accepted
Publication Type: Journal article, Original article
Future Publication Type: Journal article
Publication year: 2019
Publisher: Elsevier
Book Volume: 177
Pages Range: 487-502
DOI: 10.1016/j.energy.2019.04.035
In this paper we propose an equilibrium model that allows to analyze subsidization schemes to affect locational choices for generation investment in electricity markets. Our framework takes into account generation investment decided by private investors and redispatch as well as network expansion decided by a regulated transmission system operator. In order to take into account the different objectives and decision variables of those agents, our approach uses a bi-level structure. We focus on the case of regionally differentiated network fees which have to be paid by generators (a so called g-component). The resulting investment and production decisions are compared to the outcome of an equilibrium model in the absence of such regionally differentiated investment incentives and to an overall optimal (first-best) benchmark. To illustrate possible economic effects, we calibrate our framework with data from the German electricity market. Our results reveal that while regionally differentiated network fees do have a significant impact on locational choice of generation capacities, we do not find significant effects on either welfare or network expansion.
APA:
Grimm, V., Rückel, B., Sölch, C., & Zöttl, G. (2019). Regionally Differentiated Network Fees to Affect Incentives for Generation Investment. Energy, 177, 487-502. https://doi.org/10.1016/j.energy.2019.04.035
MLA:
Grimm, Veronika, et al. "Regionally Differentiated Network Fees to Affect Incentives for Generation Investment." Energy 177 (2019): 487-502.
BibTeX: Download