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DIW Discussion Papers 1570 / 2016
After the Paris Climate Agreement, it is anticipated that carbon prices will differ across regions for some time. If countries use free allowance allocation as carbon leakage protection, only a fraction of carbon prices are passed through to consumers particularly by carbon intensive materials producers. Adding a consumption charge based on benchmarks applied to the material content can reinstate the ...
2016| Stefan Pauliuk, Karsten Neuhoff, Anne Owen, Richard Wood
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DIW Discussion Papers 1565 / 2016
The Italian white certificate scheme is the main national policy instrument to incentivise energy efficiency of the industrial sector. The mechanism sets binding energy-saving targets on electricity and gas distributors with at least 50,000 clients and includes a voluntary opt-in model for participation from other parties. This paper investigates and assesses the elements of the scheme that help overcome ...
2016| Jan Stede
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DIW Discussion Papers 1544 / 2016
A fundamental question regarding the design of electricity markets is whether adding auctions to the continuous intraday trading is improving the performance of the market. To approach this question, we assess the experience with the implementation of the 3 pm local auction for quarters in Germany at the European Power Exchange (EPEX SPOT) in December 2014 to assess the impact on trading volumes/liquidity, ...
2016| Karsten Neuhoff, Nolan Ritter, Aymen Salah-Abou-El-Enien, Philippe Vassilopoulos
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DIW Discussion Papers 1495 / 2015
In Germany and beyond, various capacity mechanisms are currently being discussed with a view to improving the security of electricity supply. One of these mechanisms is a strategic reserve that retains generation capacity for use in times of critical supply shortage. We argue that strategic reserves have specific advantages compared to other capacity mechanisms in the context of the European energy ...
2015| Karsten Neuhoff, Jochen Diekmann, Friedrich Kunz, Sophia Rüster, Wolf-Peter Schill, Sebastian Schwenen
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DIW Discussion Papers 1494 / 2015
Abstract EU power market design has been focused on facilitating trading between countries and for this has defined interfaces for market participants and TSOs between countries. The operation of power systems and markets within countries was not the focus of these developments. This may have contributed to difficulties of defining or implementing a common perspective in particular on intraday and ...
2015| Karsten Neuhoff, Carlos Batlle, Gert Brunekreeft, Christos Vasilakos Konstantinidis, Christian Nabe, Giorgia Oggioni, Pablo Rodilla, Sebastian Schwenen, Tomasz Siewierski, Goran Strbac
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DIW Discussion Papers 1485 / 2015
Germany changed renewable remuneration for wind power from a fixed Feed-In Tariff (FIT) to a floating Market Premium Scheme (MPS) in 2012. One aim of this adjustment was to better align the supply of generated wind electricity with the demand for it, e.g. through more system-friendly wind turbine technology choices. In energy systems with a high share of variable renewable energies, such turbines produce ...
2015| Nils May
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DIW Discussion Papers 1483 / 2015
We examine under which conditions a cap-and-trade mechanism can deliver a dynamically efficient abatement pathway and contribute to a robust investment framework. For this we develop a numerical dynamic partial-equilibrium model that includes differentiated objective functions of different market participants for holding emission allowances based on their banking strategy. If the surplus of allowances ...
2015| Anne Schopp, William Acworth, Daniel Huppmann, Karsten Neuhoff
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DIW Discussion Papers 1456 / 2015
We revisit key elements of European power market design with respect to both short term operation and longer-term investment and re-investment choices. For short term markets, the European policy debate focuses on the definition of common interfaces, like for example gate closure time. We argue that that this is insufficient if the market design is to accommodate for the different needs of renewable ...
2015| Karsten Neuhoff, Sophia Rüster, Sebastian Schwenen
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DIW Discussion Papers 1441 / 2015
The financing of infrastructures is a major topic in recent energy policy debates. Project finance, as a specialized form of debt finance, thereby has become a well-established financing tool. This paper contributes a qualitative and quantitative analysis of the determinants of the debt ratio in project finance, using data on 26 liquefied natural gas (LNG) export and import projects. We argue that ...
2015| Sophia Rüster
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DIW Discussion Papers 1418 / 2014
A shift from zonal pricing to smaller zones and nodal pricing improves efficiency and security of system operation. Resulting price changes do however also shift profits and surplus between and across generation and load. As individual actorscan lose, they might oppose any reform. We explore how free allocation of financial transmission rights to generation and load can be used to mitigate the distributional ...
2014| Friedrich Kunz, Karsten Neuhoff, Juan Rosellón