Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/162229
Authors: 
Knaut, Andreas
Obermüller, Frank
Weiser, Florian
Year of Publication: 
2017
Series/Report no.: 
EWI Working Paper 17/04
Abstract: 
Balancing power markets ensure the short-term balance of supply and demand in electricity markets and their importance may increase with a higher share of fluctuating renewable electricity production. While it is clear that shorter tender frequencies, e.g. daily or hourly, are able to increase the efficiency compared to a weekly procurement, it remains unclear in which respect market concentration will be affected. Against this background, we develop a numerical electricity market model to quantify the possible effects of shorter tender frequencies on costs and market concentration. We find that shorter time spans of procurement are able to lower the costs by up to 15%. While market concentration decreases in many markets, we - surprisingly - identify cases in which shorter time spans lead to higher concentration.
Subjects: 
Balancing Power
Market Design
Market Concentration
Tender Frequency
Provision Duration
Mixed Integer Programming
JEL: 
D47
L94
Document Type: 
Working Paper

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