Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/67052
Authors: 
Haucap, Justus
Heimeshoff, Ulrich
Jovanovic, Dragan
Year of Publication: 
2012
Series/Report no.: 
DICE Discussion Paper 75
Abstract: 
The German reserve power market was subject to important regulatory changes in recent years. A new market design was created by synchronization and interconnection of the four control areas. In this paper, we analyze whether or not the reforms led to lower prices for minute reserve power (MRP). In contrast to existing papers, we use a unique panel dataset to account for unobserved heterogeneity between the four German regional markets. Moreover, we control for endogeneity by using weather data as instruments for electricity spot market prices. We find that the reforms were jointly successful in decreasing MRP prices leading to substantial cost savings for the transmission system operators.
Subjects: 
Competition
Frequency Control
Minute Reserve Power
Regulation
Productive Efficiency
Welfare
JEL: 
C33
C36
L59
L94
ISBN: 
978-3-86304-074-1
Document Type: 
Working Paper

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