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Analysis of a capacity-based redispatch mechanism
Ehrhart, Karl-Martin
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Eicke, Anselm
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Hirth, Lion
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Ocker, Fabian
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Ott, Marion
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Schlecht, Ingmar
;
Wang, Runxi
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URN:
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urn:nbn:de:bsz:180-madoc-675775
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Document Type:
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Working paper
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Year of publication:
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2024
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The title of a journal, publication series:
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ZEW Discussion Papers
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Volume:
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24-025
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Place of publication:
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Mannheim
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Publication language:
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English
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Institution:
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Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
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MADOC publication series:
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Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
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Subject:
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330 Economics
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Classification:
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JEL:
D43 , D44 , L13 , Q41 , Q48,
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Keywords (English):
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energy market, congestion management , capacity-based redispatch , game theory , auctions
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Abstract:
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This paper discusses a capacity-based redispatch mechanism in which awarded market participants are compensated for their availability for redispatch, rather than activation. The rationale is to develop a market design that prevents so-called “inc-dec gaming” when including flexible consumers with a market-based approach. We conduct a game-theoretical analysis of a capacity-based redispatch mechanism. Our analysis reveals that despite its intention, the capacity-based redispatch is prone to undesirable behavior of market participants. The reason is that the availability payment incentivizes participants to change their energy consumption (generation) behavior. However, this also applies to undesired participants who increase the redispatch requirement through participation. Under certain assumptions, the additional redispatch potential equals the additional redispatch demand it creates. Consequently, the mechanism does not resolve network constraints, while causing costs for the compensation payments. Furthermore, we study three alternative implementation options, none of which resolves the underlying problem. It follows from our analysis that a mechanism can only be promising if it is capable to distinguish between the potential participants to exclude the undesirable ones
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 | Das Dokument wird vom Publikationsserver der Universitätsbibliothek Mannheim bereitgestellt. |
 Search Authors in
BASE:
Ehrhart, Karl-Martin
;
Eicke, Anselm
;
Hirth, Lion
;
Ocker, Fabian
;
Ott, Marion
;
Schlecht, Ingmar
;
Wang, Runxi
Google Scholar:
Ehrhart, Karl-Martin
;
Eicke, Anselm
;
Hirth, Lion
;
Ocker, Fabian
;
Ott, Marion
;
Schlecht, Ingmar
;
Wang, Runxi
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