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The economics of electricity is shaped by its physics. A well know example is the non-storability of electricity that causes its price to fluctuate widely. More generally, physical constraints cause electricity to be a heterogeneous good along three dimensions - time, space, and lead-time....
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In this paper, we apply the theory of nodal pricing to a particularly urgent issue of energy and environmental economics: the integration of wind power in electricity systems. We use a nodal pricing model to analyze the impact of German wind power production on the North Western European power...
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A paradigm shift has to be realized in future energy systems with high shares of renewable energy sources. The electrical demand has to react to the fluctuating electricity generation of renewable energy sources. To this end, flexible electrical loads like electric heating devices coupled with...
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