Unsere neue Studie

Mehrwert dezentraler Flexibilität

Oder: Was kostet die verschleppte Flexibilisierung von Wärmepumpen, Elektroautos und Heimspeichern?

Studie, Slides, Webinar:

Kernergebnisse 👇 neon.energy/mehrwert-flex
Wir schließen in den kommenden Jahren eine atemberaubende Menge neuer Verbraucher in der Niederspannung an.

In den nächsten 20 Jahren rund 500 GW EVs, Wärmepumpen & Heimspeicher

Gut oder schlecht fürs Stromsystem? Kommt darauf an: ob wir die dumm oder intelligent betreiben.

In der aktuellen Diskussion um regionale Unterschiede beim Strompreis geht einiges durcheinander.

(Beispiel von gestern: )

Hier ein Versuch, den Nebel ein wenig zu lichten👇spiegel.de/wirtschaft/net… Für private Haushalte besteht der Strompreis im Wesentlichen aus zwei Komponenten: Die Kosten der Energie ("Beschaffung") und Netzentgelte.

EU electricity market reform

One of the stickiest points in the EMD file is Art 66a. It describes when an electricity price crisis is declared & what happens then.

I find the whole approach of the Article inconsistent and counterproductive for the overall reform.

Here is why👇 twitter.com/i/web/status/1… Start with the trigger: A crisis will be declared if wholesale prices go up (how much exactly is still debated).

That’s odd because the overall reform centers around long-term contracts (PPAs, CfDs) that isolate consumers from wholesale price shocks.

Electricity market design

It is my impression that behind all the fighting about CfDs, PPAs, peak shaving products and crisis intervention lies a fundamental disagreement:

What is the purpose of electricity markets? What is the objective that they serve? Behind the statements of many senior policy makers seems the assumption that power markets are primarily social policy and should be designed to avoid energy poverty.

Or industrial policy, securing competitiveness of energy-intensive industry and keeping firms in Europe.

Wärmepumpe vs Wasserstoff

Eine verworrene Diskussion - es geht ja auch im komplexe System-Fragen: Netze, Speicher, Dunkelflaute, Infrastruktur, Lernkurven, Pfadabhängigkeit, etc.

Wenn man den ganzen Nebel mal zur Seite schiebt, ist es im Kern jedoch eigentlich ganz einfach:👇 Mit einer Wärmepumpe macht man aus einer kWh Strom rund 3 kWh nutzbare Wärme. Wenn man die gleiche kWh in einem Elektrolyseur zu Wasserstoff umwandelt und dann in einer Gastherme verbrennt, bekommt man nur 0.5 kWh Raumwärme.

Faktor 6 Unterschied!

Some people don't like wind turbines. You may or may not be one of them. But how should we account for this fact in energy system modeling?

Our answer: include disamenity costs in cost-potential curves.

New paper out: link.springer.com/article/10.100… Cost-potential curves show how much wind energy you can get at what cost.

Usually, they include only engineering cost. We've added disamenity costs, translating the fact that some people don't like turbines into monetary values.

If you read the COM proposal for a reform of the electricity market, you get the impression that CfDs will be a lasting source of huge amounts of cash that only waits to be paid out.

Just to make sure we are on the same page: We do all know that's not the case, right? Take recital (34): It talks at lengh how money should be spend, but doesn't say a word about how it should be raised.

The Merit Order Model and the Screening Curve Model are the basic equilibrium models of electricity markts.

They apply standard microeconomic thinking while accounting for *the* peculiarity of electricity: non-storability. The Merit Order Model describes how prices emerge for every hour of the year as the intersection of short-term demand and supply curves.

These curves move quickly.

26 Stromerzeuger haben Verfassungsbeschwerde gegen die Erlösabschöpfung eingelegt, die deutsche Implementierung des EU revenue cap.

Im Kern geht es um die Verwendung von sog. "fiktiven Erlösen" bei der Berechnung der Abschöpfung, also nicht tatsächlichen Einnahmen, sondern ... Benchmark-Erlösen oder dem Erlös-Potential. Wenn also ein Unternehmen Strom deutlich unter Marktpreis verkauft hat, kann die Abschöpfung die tatsächlichen Einnahmen theoretisch übersteigen.

Warum sollte man fiktive Erlöse als Grundlage verwenden?

Weil dies unter Anreiz-...

America by heat source

47% of American homes are heated with natural gas, 40% electricity (resistance + heat pumps), and about 5% each with propone and oil.

Regional differences are stark: More details:

Protecting electricity consumers from (more) price shocks

euractiv.com/section/electr…

What can be done to protect retail consumers from spiking electricity bills?

My 2 ¢ 👇 I can see three principal options to hedge retail consumers against price shocks: through the retail market, through government payments, and through investments.

21 out of 27 EU countries use time-variant distribution grid tariffs.

Germany is not among them.

acer.europa.eu/Official_docum… Time-of-use charges give signals to network users to use the network less in some periods in the day, week or year and use it more in other periods. The charges should be higher in periods when network utilisation is closer to the technical limits and lower otherwise.

Im letzten Frühjahr gab es eine hitzige Debatte um die Frage, ob Deutschland ein Embargo gegen russische Erdgasimporte verhängen soll.

Ich bin kein Makroökonom und habe mich daran deswegen nicht beteiligt.

Ich denke aber, es ist wichtig, hier nochmal drauf zu schauen, ... ... auch im Hinblick auf zukünftige energiepolitische Diskussionen.

BASF ist das politisch einflussreichste Grundstoff-Industrieunternehmen Deutschlands und ihr Chef Martin Brudermüller einer der Top-Einflussnehmer auf die deutsche Energiepolitik. ...

Financial Contracts for Differences

Fresh from the press: our updated paper on CfD design

In the paper:
-What are CfDs?
-What’s the problem with CfDs?
-How can these problems be solved?

A proposal for a CfD-forward hybrid 👇

hdl.handle.net/10419/268370 CfDs are financial contracts that specify payments from a buyer to a seller if the price of an underlying is below the agreed-upon strike price & vice versa.

They are derivatives used in many security and commodity markets – like forwards, futures, options and swaps.

Electricity market reform

The COM consultation comes with an introductory text. Much of it I can subscribe to.

- Focus on short-term markets as a historical policy blindspot
- Importance of spiky spot prices
- Credit guarantees as a possible way to leverage the PPA market
- ... Here I disagree:

"The current regulatory framework regarding long-term instruments has proven insufficient to protect large industrial consumers ..."

Big industry had all possibilities to hedge against prices, using forwards / futures or PPAs. They choose not to.

Electricity market reform

The claims made about electricity markets and how they supposedly (not) work have evolved.

Last year: "marginal pricing makes no sense"

This year: "marginal cost pricing is the bedrock of the market, but it fails to ensure proper long term signals" That statement, in its simplicity, is simply inaccurate

Of course a long-term equilibrium exists in electricity market, and of course short-term price signals pull investment in that direction.

Explained here: vimeo.com/778468817/9c35…

Gas price cap

So what is it exactly that the EU has agreed on?

From reading the press release and watching the press conferece, my understanding is the following. The thing continues to be called a "market correction mechanism".

It has two trigger that both must hold for 3 consecutive days:
- TTF front month price >180 €/MWh
- Price spread to global LNG market >35 €/MWh

The European Commission non-paper on Electricity Market Design has been leaked.

The non-paper does not propose any specific reforms.

At accompanies a stakeholder consultation invites feedback on a broad range of topics: 1) Pricing Inframarginal Technologies Based on Their True Production Costs

2) Reducing the Role of Gas in Short-Term Markets

3) Better consumer empowerment and protection

4) Improving Market Transparency, Surveillance and Integrity

Fresh from the press: an update of our paper on gas demand in Germany

Germany households saved a massive 42% in October.

In numbers, that's 13 TWh or more than 1% of the country's annual consumption. In words, that's *a lot*.

But see yourself 👇

econstor.eu/handle/10419/2… It has been clear early on: the extent to which European gas consumers cut their demand is maybe the most crucial factor in managing the energy crisis.

Many have been dismissive, claiming people simply don't adjust their energy consumption. Some claim firms should not.

It's fashionable in policy circles to be dismissive about commodity speculators.

The funny thing is: governments have become probably the biggest speculators on European gas markets this year (possibly without knowing).

Let me explain 👇 When you buy gas on spot markets, store it, you usually simultaneously sell it on forward markets. This way, you lock in arbitrage profits and avoid being exposed to price risks. This is what a non-speculative storage operator would do.

But that's exactly *not* what THE did.

Iberian mechanism

ICIS has published an assessment if the Iberian mechanism would be expanded to the EU.

Full report 👉linkedin.com/feed/update/ur…

Key quotes 👇 Last week the European Commission assessed the impact of an Iberian-style price cap for the whole of the EU, estimating that the policy measure would have net benefits, but would lead to a 5-9bcm increase in gas demand in 2023.