There is an ongoing debate on the introduction of capacity markets in most European countries while a few of them have already established capacity markets. Since the implementation of independent national capacity markets is not in line with the target of a pan-European internal electricity...

We develop an analytical model to derive the competitive market equilibrium for electricity spot and reserve markets under stochastic demand and uncertain renewable electricity generation. We then derive the welfare-optimal provision of reserves. At first-best, cost of reserve capacity is...

Practitioners in the electricity industry aim to assess the value of power plants or other real options several months or even years ahead of operation. Such a valuation is notably required for hedging purposes. The revenue streams to be earned in the spot market are thereby already secured on...

There is a broad consensus that the energy transition planned in Europe, along with an increasing share of renewable energy sources, demands a sufficient number of flexibility providers. The established flexibility procurement mechanisms, notably the reserve markets, are expected to reflect the...

The analysis of future energy systems with increasing shares of renewable energy production poses various challenges to models used in the field of energy system analysis. Aggregation is one solution to reduce the computation time of large optimization problems, especially for optimization...

Hydro electricity generation is of great importance for the current and the future electricity system since it provides electricity without emitting CO2 and moreover hydro reservoirs offer high operational flexibility. With increasing shares of fluctuating renewable energies, their value is even...

Climate change mitigation requires governmental intervention, but different choices are at hand. While economists in general advocate for first-best instruments, reality looks quite different, with especially many subsidy schemes for renewable energies being used. Supporters of these schemes...

The German housing stock needs substantial energetic retrofit to meet carbon reduction targets. Various instruments are available to motivate building owners to improve the energy efficiency of their dwellings. These instruments mainly focus on the economic issue of funding and financing energy...

New and alternative delimitations of price zones for Central Western Europe (CWE) might constitute a mid-term solution to cope with the increasing congestion in the electricity transmission grids. The significantly growing infeed from renewable energy sources puts more and more pressure on the...

Increasing infeed from renewable energy sources poses considerable challenges to system operators who are in charge of power system reliability. Accordingly, the frequency of network congestion and the corresponding congestion management costs have increased dramatically over the last years and...