Topic Markets

Merger Efficiency and Welfare Implications of Buyer Power

This paper analyzes the welfare implications of buyer mergers, which are mergers between downstream firms from different markets. We focus on the interaction between the merger's effects on downstream efficiency and on buyer power in a setup where one manufacturer with a non-linear cost function sells to two locally competitive retail markets. We show that size discounts for the merged entity has no ...

The Moratorium on Nuclear Energy: No Power Shortages Expected

With the moratorium on nuclear energy, the German federal government passed a resolution to shut down seven nuclear power plants for a period of three months. According to the calculations of DIW Berlin (German Institute for Economic Research), sufficient electricity is being produced despite the nuclear plants' removal from the grid. Electricity prices are only likely to increase slightly. The moratorium ...

The Lights Won't Go Out: Interview with Claudia Kemfert

Opening the Electricity Market to Renewable Energy: Making Better Use of the Grid

Opening the electricity market to renewable energy sources would create flexibility for the further integration of renewable energy, leading to considerably lower costs and emissions. This requires the electricity markets to be reorganized in three ways. Firstly, most trading, and therefore production decision-making, is completed at least one day prior to electricity production. But it must be possible ...

How Emission Certificate Allocations Distort Fossil Investments: The German Example

Despite political activities to foster a low-carbon energy transition, Germany currently sees a considerable number of new coal power plants being added to its power mix. There are several possible drivers for this "dash for coal", but it is widely accepted that windfall profits gained through free allocation of ETS certificates play an important role. Yet the quantification of allocation-related investment ...

How Emission Certificate Allocations Distort Fossil Investments: The German Example

Despite political activities to foster a low-carbon energy transition, Germany currently sees a considerable number of new coal power plants being added to its power mix. There are several possible drivers for this "dash for coal", but it is widely accepted that windfall profits gained through free allocation of ETS certificates play an important role. Yet the quantification of allocation-related investment ...

Technical Aspects of Nodal Pricing

The expansion of renewable generation and closer integration of European power markets requires new tools and procedures for system operation. The US experience with nodal pricing offers options to tackle the emerging challenges, and thus may facilitate further integration of intermittent renewable generation technologies. At a one day roundtable hosted by CPI Berlin, experts from European transmission ...

Consistency with Other EU Policies, System and Market Integration: A Smart Power Market at the Centre of a Smart Grid ; D20 Report

Liquidity and Asset Prices: How Strong Are the Linkages?

The appropriate design of monetary policy in integrated financial markets is one of the most challenging areas for central banks. One hot topic is whether the increase in liquidity has contributed to the formation of price bubbles in asset markets in the years preceding the financial crisis. If linkages are strong, the inclusion of asset prices in the monetary policy rule may limit speculative runs ...

Modeling Market Failures and Regulation in the Changing German Power Market: Dissertation

The German power market is shaped by several distinctive trends. These include market restructuring, climate policy measures, renewable energy integration, and electric vehicles. In this thesis, I conduct in-depth model-based analyses of specific economic questions related to the aforementioned developments. More precisely, I examine selected market failures and the need for economic regulation. In ...