Jonas Egerer, Jens Weibezahn, Hauke Herrmann
We discuss the implications of zonal pricing (i.e. a northern and southern price zone) on the German electricity spot market. In the northern zone, the additions in wind capacity combined with existing regional overcapacities of low variable cost power plants cause large regional supply surpluses in the day-ahead market dispatch. The current uniform pricing regime does not consider internal transmission capacity constraints and often results in technically infeasible market results. Ex-post adjustments of the market result by redispatch become necessary. Zonal or nodal pricing would enable a better market integration of scarce transmission capacities in a market with regional imbalances. Yet regional price differentiation comes at the cost of redistribution between stakeholders. Using a line sharp electricity sector model, this paper analyzes the possible efficiency gains and the distributional effects of two price zones and nodal pricing, respectively, in the German electricity system in 2012 and for a 2015 scenario. Results show that zonal pricing can reduce system costs and prices in the southern price zone are higher than in the northern price zone, on average. However, the average price difference and thus distributional effects are rather low on annual level. Lower redispatch costs from two price zones in Germany can results in higher distributional effects for power plants and consumers. In summary, distributional effects of introducing two price zones are surprisingly small compared to the wholesale price or different network charges in Germany.
Themen: Energiewirtschaft
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