Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227510
Authors: 
Schmidt, Lukas
Zinke, Jonas
Year of Publication: 
2020
Series/Report no.: 
EWI Working Paper No. 20/06
Abstract: 
This paper evaluates investment incentives for wind power under uniform and nodal pricing.An electricity system model is developed, which allows for investments into wind power whileconsidering transmission grid constraints in detail. Targeting equally high wind capacitiesunder nodal and uniform pricing until 2030, locations of new wind power plants shift towardssites with lower wind yield under nodal prices. The wind energy fed into the grid, though, ishigher under nodal pricing since curtailment is cut to a third. Grid-optimal wind locationsrequire higher subsidy payments but decrease yearly variable supply costs by 1.5% in 2030.However, distributional effects are an obstacle to implementing nodal pricing, where about75% of German demand faces electricity costs increase of about 5%. For mitigating distortedinvestment signals of uniform pricing, implementing investment restrictions within grid ex-pansion areas prove to be more promising than a latitude-dependent generator-componentin the grid tariff design.
Subjects: 
Nodal pricing
Market design
Energy System Modeling
Renewable Energies
Market Values
JEL: 
Q42
Q48
C61
D47
Document Type: 
Working Paper

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