Integrated North Sea grids: The costs, the benefits and their distribution between countries

A large number of offshore wind farms and interconnectors are expected to be constructed in the North Sea region over the coming decades, creating substantial opportunities for the deployment of integrated network solutions. Creating interconnected offshore grids that combine cross-border links and connections of offshore plants to shore offers multiple economic and environmental advantages for Europe's energy system. However, despite evidence that integrated solutions can be more beneficial than traditional radial connection practices, no such projects have been deployed yet. In this paper we quantify costs and benefits of integrated projects and investigate to which extent the cost-benefit sharing mechanism between participating countries can impede or encourage the development of integrated projects. Three concrete interconnection case studies in the North Sea area are analysed in detail using a national-level power system model. Model outputs are used to compute the net benefit of all involved stakeholders under different allocation schemes. Given the asymmetric distribution of costs and benefits, we recommend to consistently apply the Positive Net Benefit Differential mechanism as a starting point for negotiations on the financial closure of investments in integrated offshore infrastructure

Evaluation of large-scale hydrogen storage systems in the German energy sector

The increasing share of renewable energies in the German energy sector is changing the present generation structure and requires the usage of more flexible technologies. Storage systems are one option to balance fluctuating electricity generation and demand. But due to the high investments required, all storage technologies have difficulties meeting the challenge of economic feasibility. However, chemical long-term storage technologies that use a gaseous medium as the energy carrier have the advantage of being a versatile storage medium that can be sold on different markets. This paper shows that serving both the electricity and fuel markets has positive impacts on the profitability of hydrogen storage systems. Under favorable conditions, which are characterized by high shares of renewable energies and high prices for energy carriers, a positive economic result is possible

The Merit-order effect: A detailed analyis of the price effect of renewable electricity generation on spot market prices in Germany

The German feed-in support of electricity generation from renewable energy sources has led to high growth rates of the supported technologies. Critics state that the costs for consumers are too high. An important aspect to be considered in the discussion is the price effect created by renewable electricity generation. This paper seeks to analyse the impact of privileged renewable electricity generation on the electricity market in Germany. The central aspect to be analysed is the impact of renewable electricity generation on spot market prices. The results generated by an agent-based simulation platform indicate that the financial volume of the price reduction is considerable. In the short run, this gives rise to a distributional effect which creates savings for the demand side by reducing generator profits. In the case of year 2006, the volume of the merit-order effect exceeds the volume of the net support payments for renewable electricity generation which have to be paid by consumers

Agent-based simulation of electricity markets - a literature review

Liberalisation, climate policy and promotion of renewable energy are challenges to players of the electricity sector in many countries. Policy makers have to consider issues like market power, bounded rationality of players and the appearance of fluctuating energy sources in order to provide adequate legislation. Furthermore the interactions between markets and environmental policy instruments become an issue of increasing importance. A promising approach for the scientific analysis of these developments is the field of agent-based simulation. The goal of this article is to provide an overview of the current work applying this methodology to the analysis of electricity markets