Subproject: Economic analysis of flexibility incentives in energy market design
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Funding: German Federal Ministry for Economic Affairs and Climate Action (BMWK)
Goals of interdisciplinary cooperation:
The interdisciplinary research project FlexIMa (“Flexibilität in den Markt”) examines how changes in the market environment, market design and regulatory framework influence investment incentives and operating decisions for flexibility and thus also the electricity system. Several possible development paths are assumed for the market environment, which cover various uncertainties in the transformation to a climate-neutral electricity system. The central research topic of FlexIMa is the definition, design and detailed analysis of suitable developments in regulation and market design for a market-driven ramp-up of flexibility. The project is developing possible concepts for this ramp-up resulting from combinations of changes in market design (e.g. via different submarkets and regional price signals) and the regulatory framework (e.g. differentiated grid charges). A focus is put on quantifying the benefits of an efficient flexibility integration in terms of investment, system security, system costs and CO2 reduction, as well as analyzing resilient investment strategies for various flexibility options in a highly dynamical market environment.
UTN’s contribution:
A multi-level electricity market model is further developed and applied in order to enable a well-founded economic analysis of the future incentive framework for existing and newly created flexibility in various scenarios for the German electricity system in the European market. Possible transformation paths of the market environment and characteristics in terms of market design and regulatory framework are being developed in collaboration with the research partners with technical, economic and legal expertise. These framework conditions are implemented in a multi-level electricity market model in order to assess market incentives for flexibility and their effects on the overall system and quantify them. Part of the analysis is the interplay of energy market design and regulation with investment incentives and the resulting operating strategies for refinancing various flexibility options. In a joint quantitative analysis with the Technische Hochschule Ingolstadt, the operation of flexibility is optimized on a technology-specific, possibly location-dependent and intertemporal basis across various submarkets with the regulatory framework being taken into account.
Project manager: Veronika Grimm
Stuff: N.N.
Project term: 01.01.2024 – 31.12.2026