A welfare analysis of electricity transmission planning in Germany |
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| Affiliation: | 1. DIW Berlin, Department of Energy, Transportation, Environment, Mohrenstraße 58, 10117 Berlin, Germany;2. CIDE, Department of Economics, Carretera México-Toluca 3655, Col. Lomas de Santa Fe, C.P. 01210, Mexico City, Mexico;1. Berlin University of Technology, Workgroup for Infrastructure Policy (WIP), Straße des 17. Juni 135, 10623 Berlin, Germany;2. German Institute for Economic Research (DIW Berlin), Department of Energy, Transportation, Environment, Mohrenstraße 58, 10117 Berlin, Germany;3. German Advisory Council on Environment (SRU), Luisenstraße 46, 10117 Berlin, Germany;4. Hertie School of Governance, Energy Economics and Sustainability, Friedrichstraße 180, 10117 Berlin, Germany;1. Friedrich-Alexander-Universität Erlangen-Nürnberg, Chair of Economic Theory, Lange Gasse 20, 90403, Nürnberg, Germany;2. Friedrich-Alexander-Universität Erlangen-Nürnberg, Chair of Industrial Organization and Energy Markets, Lange Gasse 20, 90403, Nürnberg, Germany;1. Associate Professor, CGEMP, Université Paris Dauphine and researcher of ‘Chair European Electricity markets’ (CEEM) of Paris Dauphine University, France;2. Centre International de Recherche sur l’Environnementet le Développement (CIRED) and Chaire European Electricity Markets (CEEM), Paris Dauphine University, France;1. MaREI Centre, Environmental Research Institute, University College Cork, Lee Road, Cork, Ireland;2. School of Engineering, University College Cork, Cork, Ireland;3. Climate Policy Group, Institute for Environmental Decisions, Zurich ETH 8092, Switzerland;4. Centre for Environmental Policy, Imperial College London, London SW7 1NA, UK |
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| Abstract: | We analyze the electricity transmission planning process in Germany (Netzentwicklungsplan), which separates transmission expansion decisions from generation dispatch. We employ an economic modeling approach to analyze two different network planning settings. In the first setting, there is no trade-off between transmission network development and generation dispatch, as is currently the case in Germany. A second setting alternatively allows for such a trade-off, and thus represents a welfare superior way of transmission network planning. Applications with the two model variants are carried out for the German electricity system in 2035. The results illustrate overinvestment in transmission capacity and decreased welfare associated with the Netzentwicklungsplan. |
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| Keywords: | Transmission planning Nodal prices Congestion management Electricity Germany |
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