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 rst-best, cost of reserve capacity is balanced...

Forecasting hourly electricity prices and their characteristic properties is a core challenge for energy generation companies and trading houses. The short-term marketing and purchase of electricity is usually managed with standardized products traded on different markets and with specific...

Energy system models are limited in their scope and level of disaggregation by the availability offast computing hardware. While improvements in hardware and solver developments have led toan increasing size of solvable models, problems with high temporal and geographical resolutionremain...

Growing shares of renewable energy sources (RES) in the electricity system increase the need for flexible balancing of supply-dependent feed-in of RES and time-varying demand. Besides flexible, conventional technologies and demand-responses, storage is an important option. Through the use of an...

With the increasing amount of volatile infeed from renewable energy sources the need for flexibility becomes more and more urgent. This holds especially for the distribution grids where critical load situations caused by high local renewable infeed occur increasingly often. Therefore, demand...

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...

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...

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...

Due to the call for further integration of European markets and the targeted climate goals, both European electricity systems and markets have undergone continuous changes over the last few decades. As part of these developments, the so-called Flow-Based Market Coupling (FBMC) superseded the...