Impact of Germany's energy transition on the Nordic power market – A market-based multi-region energy system model

Research output: Contribution to journalArticle

Researchers

Research units

  • Aalborg University
  • KTH Royal Institute of Technology
  • International Atomic Energy Agency

Abstract

Abstract The EU energy policy aims at creating a single European electricity market through market couplings and grid expansions. To analyse the implications of such power market couplings, we propose a market-based multi-region energy system model. The model simulates a multi-region power market (by applying market optimization and network theory), with detailed representation of each region as an energy system (by simulation of both heat and power sectors). We examine the impact of further integration of variable renewable energy (VRE) in Germany on the Nordic power market. The results indicate that the average electricity price slightly grows in the Nordic power market after Germany's Energy Transition (Energiewende). Hence, the economic surplus of Nordic consumers diminishes while Nordic producers improve their gain under new market conditions. Considering the gird congestion income, the overall system-level benefits (social welfare) will improve in the Nordic region after Germany's Energiewende. However, this gain is not equally distributed among different Nordic countries and across different stakeholders. Furthermore, the Energiewende slightly increases carbon emissions from power and district heating (DH) sectors, and reduces the flexibility in integration of VRE in some Nordic countries like Denmark. The direct interconnection of Norway and Germany through NordLink will contribute to the flexibility in wind integration in other Nordic countries, such as Denmark and Finland.

Details

Original languageEnglish
Pages (from-to)1640-1662
Number of pages23
JournalEnergy
Volume115
Issue number(Part 3)
Publication statusPublished - Nov 2016
MoE publication typeA1 Journal article-refereed

    Research areas

  • Energy systems model, Energy policy, Power market coupling, Renewable energy, Power market model

ID: 8811873