TY - JOUR A1 - Hirth, Lion A1 - Ueckerdt, Falko A1 - Edenhofer, Ottmar T1 - Why Wind is not Coal: On the Economics of Electricity Generation JF - The Energy Journal N2 - Electricity is a paradoxical economic good: it is highly homogeneous and heterogeneous at the same time. Electricity prices vary dramatically between moments in time, between location, and according to lead-time between contract and delivery. This three-dimensional heterogeneity has implication for the economic assessment of power generation technologies: different technologies, such as coal-fired plants and wind turbines, produce electricity that has, on average, a different economic value. Several tools that are used to evaluate generators in practice ignore these value differences, including "levelized electricity costs", "grid parity", and simple macroeconomic models. This paper provides a rigorous and general discussion of heterogeneity and its implications for the economic assessment of electricity generating technologies. It shows that these tools are biased, specifically, they tend to favor wind and solar power over dispatchable generators where these renewable generators have a high market share. A literature review shows that, at a wind market share of 30-40%, the value of a megawatt-hour of electricity from a wind turbine can be 20-50% lower than the value of one megawatt-hour as demanded by consumers. We introduce "System LCOE" as one way of comparing generation technologies economically. KW - Power generation KW - Electricity sector KW - Integrated assessment modeling KW - Wind power KW - Solar power KW - Variable renewables KW - Integration costs KW - Welfare economics KW - Power economics KW - Levelized electricity cost KW - LCOE KW - Grid parity Y1 - 2016 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-22828 U6 - https://doi.org/10.5547/01956574.37.3.lhir SN - 1944-9089 VL - 37 IS - 3 SP - 1 EP - 27 ER - TY - JOUR A1 - Hirth, Lion A1 - Schlandt, Jakob T1 - Übertragungsnetzbetreiber erwarten massiven Wertverlust für Solarstrom BT - Der Blog für Energiepolitik JF - Phasenprüfer Y1 - 2016 UR - http://phasenpruefer.info/uebertragungsnetzbetreiber-erwarten-massiven-wertverlust-fuer-solarstrom/ UR - http://phasenpruefer.info/ ER - TY - JOUR A1 - Hirth, Lion T1 - What caused the drop of European electricity prices? A factor decomposition analysis JF - The Energy Journal N2 - European wholesale electricity prices have dropped by early two thirds since their all-time high around 2008. Different factors have been blamed, or praised, for having caused the price slump: the expansion of renewable energy; the near-collapse of the European emissions trading scheme; over-optimistic power plant investments; a decline in final electricity consumption; and cheap coal and natural gas. This ex-post study of European electricity markets from 2008 to 2015 uses a fundamental power market model to quantify their individual contributions on day-ahead prices. The two countries we study in detail, Germany and Sweden,differ significantly: fuel and CO2 prices were important price drivers in Germany, but in Sweden it was electricity demand. This difference is explained by the nature of the hydro-dominate Nordic electricity system. In both countries, however, the single largest factor depressing prices was the expansion of renewable energy. At the same time, Germany’s nuclear phase-out had an upward effect on prices. If one defines the Energiewende as the combination of these two policies, its net effect on power prices was negligible. KW - electricity price KW - ex-post analysis KW - utility crisis Y1 - 2018 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-23227 UR - http://www.iaee.org/en/publications/download-view.aspx?id=3031 U6 - https://doi.org/10.5547/01956574.39.1.lhir SN - 0195-6574 SN - 1944-9089 N1 - This is a post-peer-review, pre-copyedit version of an article published in The Energy Journal. The final authenticated version is available online at: DOI 10.5547/01956574.39.1.lhir VL - 39 IS - 1 SP - 143 EP - 157 ER - TY - JOUR A1 - Nahmmacher, Paul A1 - Schmid, Eva A1 - Hirth, Lion A1 - Knopf, Brigitte T1 - Carpe diem: A novel approach to select representative days for long-term power system modeling JF - Energy N2 - In order to explore scenarios on the future of power systems, a variety of numerical models have been developed. As the share of variable renewable energy sources, particularly wind and solar, is projected to significantly increase, accounting for their temporal and spatial variability becomes ever more important in developing sound long-term scenarios. Computational restrictions prevent many long-term power system models being developed with an hourly resolution; instead they use time slices that aggregate periods with similar load and renewable electricity generation levels. There is to date no reproducible and validated method to derive and select time slices for power system models with multiple fluctuating time series. In this paper, we present a novel and effective method that is easily applied to input data for all kinds of power system models. We utilize this procedure in the long-term power system model LIMES-EU and show that a small number of representative days developed in this way are sufficient to reflect the characteristic fluctuations of the input data. Alongside a validation of the method, we discuss the conditions under which seasonal differentiation, and the use of representative weeks instead of days, is necessary. KW - power system modeling KW - variability KW - renewable energy sources KW - time slices Y1 - 2016 U6 - https://doi.org/10.1016/j.energy.2016.06.081 SN - 0360-5442 VL - 112 SP - 430 EP - 442 ER - TY - THES A1 - Hirth, Lion T1 - The Economics of Wind and Solar Variability – How the Variability of Wind and Solar Power affects their Marginal Value, Optimal Deployment, and Integration Costs T2 - Die Ökonomik von variabler Wind- und Solarenergie: ökonomischer Wert, optimaler Ausbau und Integrationskosten von Wind- und Solarstrom KW - Wind power KW - Solar power KW - Power system economics KW - Integration costs KW - Intermittency Y1 - 2014 U6 - https://doi.org/10.14279/depositonce-4291 PB - Technical University of Berlin CY - Berlin ER - TY - JOUR A1 - Hirth, Lion A1 - Ziegenhagen, Inka T1 - Wind, Sonne, und Regelleistung BT - Zeitschrift für Energiewirtschaft, Recht, Technik und Umwelt JF - Energiewirtschaftliche Tagesfragen : et Y1 - 2013 UR - https://www.neon-energie.de/Hirth-Ziegenhagen-2013-Wind-Sonne-Regelleistung.pdf SN - 0013-743X - 0720-6240 IS - 10 SP - 59 PB - EW Medien und Kongresse GmbH CY - Frankfurt am Main ET - 13 ER - TY - CHAP A1 - Hirth, Lion A1 - Ueckerdt, Falko ED - Stolten, Detlef ED - Scherer, Viktor T1 - The Decreasing Market Value of Variable Renewables: Integration Options and Deadlocks T2 - Transition to Renewable Energy Systems KW - variable renewables KW - market value KW - integration costs Y1 - 2013 SN - 978-3527332397 SN - 9783527673872 U6 - https://doi.org/10.1002/9783527673872.ch6 SP - 75 EP - 92 PB - Wiley VCH CY - Oxford ER - TY - JOUR A1 - Hirth, Lion T1 - Die Ökonomie der Energiewende BT - Der Blog für Energiepolitik JF - Phasenprüfer KW - Energiewende KW - Schwachwindanlagen KW - Strommarktdesign KW - Windkraft Y1 - 2015 UR - http://phasenpruefer.info/oekonomie-energiewende/ UR - http://phasenpruefer.info/ ER - TY - JOUR A1 - Hirth, Lion T1 - Das Ende der Grundlast BT - Der Blog für Energiepolitik JF - Phasenprüfer Y1 - 2015 UR - http://phasenpruefer.info/ende-grundlast/ UR - http://phasenpruefer.info/ ER - TY - JOUR A1 - Weber, Christoph A1 - Hirth, Lion T1 - Jenseits des Sündenbocks Erneuerbare: Was hat den Verfall des Börsenstrompreises wirklich verursacht? BT - Der Blog für Energiepolitik JF - Phasenprüfer Y1 - 2015 UR - http://phasenpruefer.info/verfall-boersenstrompreis/ UR - http://phasenpruefer.info/ ER - TY - JOUR A1 - Hirth, Lion A1 - Mühlenpfordt, Jonathan A1 - Bulkeley, Marisa T1 - The ENTSO-E Transparency Platform. An assessment of Europe’s most ambitious electricity data platform JF - Applied Energy N2 - Applied power system research is data intensive, often requiring hour-by-hour data on electricity consumption and generation as well as detailed information about technical and cost parameters of power stations. The European Union obliges firms to publish much of this information on a common website, the “ENTSO-E Transparency Platform” operated by the association of transmission system operators. It is possibly the most ambitious platform for power system data globally. However, anecdotal evidence from users indicates significant shortcomings regarding data quality and usability. This paper provides an introduction to and an assessment of the Transparency Platform, helping researchers to use it more efficiently and to judge data quality more rigorously. Y1 - 2018 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-28171 U6 - https://doi.org/10.1016/j.apenergy.2018.04.048 SN - 0306-2619 N1 - This is a post-peer-review, pre-copyedit version of an article published in Applied Energy. The final authenticated version is available online at: DOI 10.1016/j.apenergy.2018.04.048 VL - 225 SP - 1054 EP - 1067 ER - TY - JOUR A1 - Stefan, Pfenninger A1 - Hirth, Lion A1 - Schlecht, et. al., Ingmar T1 - Opening the black box of energy modelling: Strategies and lessons learned JF - Energy Strategy Reviews N2 - The global energy system is undergoing a major transition, and in energy planning and decision-making across governments, industry and academia, models play a crucial role. Because of their policy relevance and contested nature, the transparency and open availability of energy models and data are of particular importance. Here we provide a practical how-to guide based on the collective experience of members of the Open Energy Modelling Initiative (Openmod). We discuss key steps to consider when opening code and data, including determining intellectual property ownership, choosing a licence and appropriate modelling languages, distributing code and data, and providing support and building communities. After illustrating these decisions with examples and lessons learned from the community, we conclude that even though individual researchers' choices are important, institutional changes are still also necessary for more openness and transparency in energy research. Y1 - 2018 U6 - https://doi.org/10.1016/j.esr.2017.12.002 VL - 19 SP - 63 EP - 71 ER - TY - JOUR A1 - Hirth, Lion T1 - The benefits of flexibility: The value of wind energy with hydropower JF - Applied Energy N2 - Several studies have shown that the revenue of wind power generators on spot markets (“market value”) diminishes with increasing deployment. This “value drop” is mostly observed in power markets that are dominated by thermal power plants, such as in Germany. This paper assesses the wind market value in power systems where hydroelectric stations with large reservoirs prevail, such as in Sweden. Due to their dispatch flexibility, such hydropower compensates for wind power output variability and thereby mitigates the wind power value drop. The market value of electricity from wind declines with penetration in both types of power systems, but it tends to decline at a slower rate if hydropower is present. This paper presents empirical evidence on the relevance of this effect derived from market data and numerical model results. Our results indicate that when moving from 0% to 30% wind penetration, hydropower mitigates the value drop by a third. As a result, 1 MWh of wind energy is worth 18% more in Sweden than in Germany. Sensitivity analyses indicate high robustness despite large parameter uncertainty: in 80% of all sensitivities, wind energy is valuable 12–29% more in Sweden than in Germany. The benefits of hydropower seem to level off at around 20% wind penetration. This suggests that the hydro flexibility is “exhausted” at this level. Low wind speed wind turbines, carbon pricing, and upgrades of hydropower generation capacity can lever the added value of hydro flexibility further. Not only is wind energy more valuable in the presence of hydropower, hydroelectricity also becomes more valuable if paired with wind power. Y1 - 2016 U6 - https://doi.org/10.1016/j.apenergy.2016.07.039 VL - 181 SP - 210 EP - 223 ER - TY - JOUR A1 - Hirth, Lion T1 - Open data for electricity modeling: Legal aspects JF - Energy Strategy Reviews N2 - Power system modeling is data intensive. In Europe, electricity system data is often available from sources such as statistical offices or system operators. However, it is often unclear if these data can be legally used for modeling, and in particular if such use infringes intellectual property rights. This article reviews the legal status of power system data, both as a guide for data users and for data publishers. It is based on interpretation of the law, a review of the secondary literature, an analysis of the licenses used by major data distributors, expert interviews, and a series of workshops. A core finding is that in many cases the legality of current practices is doubtful: in fact, it seems likely that modelers infringe intellectual property rights quite regularly. This is true for industry analysis but also academic researchers. A straightforward solution is open data – the idea that data can be freely used, modified, and shared by anyone for any purpose. To be open, it is not sufficient for data to be accessible free of cost, it must also come with an open data license, the most common types of which are also reviewed in this paper. Y1 - 2019 U6 - https://doi.org/10.1016/j.esr.2019.100433 N1 - Open Access publication ET - 27 ER - TY - JOUR A1 - Jerrentrup, Lars A1 - Lotz, Bastian A1 - Tiedemann, Silvana A1 - Hirth, Lion T1 - Technology-Neutral Auctions for Renewable Energy: EU Law vs. Member State Reality JF - Journal for European Environmental & Planning Law N2 - European Union competition law, intended to thwart subsidies paid out by national governments, plays an important role in shaping EU Member States’ support schemes for renewable energy. The Environmental and Energy State Aid Guidelines 2014–2020, which formalize the European Commission’s take on subsidies in the electricity sector, prescribe technology-neutral auctions as the standard mechanism to determine support levels. In this study, we have assessed the formal decisions of the Commission with respect to technology-neutrality between July 2014 and May 2018. It turns out that 16 out of 18 schemes are not technology-neutral and figure high degrees of technology-differentiation. We have also studied the exemption clauses invoked to justify technology-discrimination, finding that the most ambiguous clause is used most frequently, and that the application and level of scrutiny varies strongly from case to case. The State Aid Guidelines are meant to increase transparency and legal certainty. We find that with respect to technology-neutral auctions for renewable energy, the Guidelines fail to deliver on their purpose. Y1 - 2019 UR - https://nbn-resolving.org/urn:nbn:de:kobv:b1570-opus4-30906 U6 - https://doi.org/10.1163/18760104-01604005 SN - 1876-0104 N1 - This is a post-peer-review, pre-copyedit version of an article published in Journal for European Environmental & Planning Law. The final authenticated version is available online at: https://doi.org/10.1163/18760104-01604005 VL - 16 SP - 386 EP - 406 ET - 4 ER - TY - JOUR A1 - Ruhnau, Oliver A1 - Hirth, Lion A1 - Praktiknjo, Aaron T1 - Time series of heat demand and heat pump efficiency for energy system modeling JF - Nature Scientific Data N2 - With electric heat pumps substituting for fossil-fueled alternatives, the temporal variability of their power consumption becomes increasingly important to the electricity system. To easily include this variability in energy system analyses, this paper introduces the “When2Heat” dataset comprising synthetic national time series of both the heat demand and the coefficient of performance (COP) of heat pumps. It covers 16 European countries, includes the years 2008 to 2018, and features an hourly resolution. Demand profiles for space and water heating are computed by combining gas standard load profiles with spatial temperature and wind speed reanalysis data as well as population geodata. COP time series for different heat sources – air, ground, and groundwater – and different heat sinks – floor heating, radiators, and water heating – are calculated based on COP and heating curves using reanalysis temperature data. The dataset, as well as the scripts and input parameters, are publicly available under an open source license on the Open Power System Data platform. Y1 - 2019 U6 - https://doi.org/10.1038/s41597-019-0199-y N1 - Open Access publication VL - 6 IS - 189 ER - TY - JOUR A1 - Koch, Christopher A1 - Hirth, Lion T1 - Short-term electricity trading for system balancing: An empirical analysis of the role of intraday trading in balancing Germany's electricity system JF - Renewable & Sustainable Energy Reviews N2 - Previous studies have noted that, surprisingly, Germany’s dramatic expansion of wind and solar energy coincided with a reduction of short-term balancing reserves. This paper provides further and updated evidence, supporting this “German Balancing Paradox”: since 2011 wind and solar energy nearly doubled while reserve requirements and reserve activation declined by around 50%. We quantitatively explore one reason for reduced balancing needs: increased and improved short-term wholesale electricity trading. Electricity trading is now commonly done around the clock and based on quarter hours, rather than hours. The shift to quarter-hourly products alone explains a decrease in balancing energy by 17%. We also find strong evidence for market parties to respond efficiently to imbalance charges, suggesting that market-based approaches to balancing work. Y1 - 2019 U6 - https://doi.org/10.1016/j.rser.2019.109275 N1 - Also available at SSRN: https://ssrn.com/abstract=3284262 or http://dx.doi.org/10.2139/ssrn.3284262 VL - 113 ER - TY - JOUR A1 - Wiese, Frauke A1 - Schlecht, Ingmar A1 - Bunke, Wolf-Dieter A1 - Gerbaulet, Clemens A1 - Hirth, Lion A1 - Jahn, Martin A1 - Kunz, Friedrich A1 - Lorenz, Casimir A1 - Mühlenpfordt, Jonathan A1 - Reimann, Juliane A1 - Schill, Wolf-Peter T1 - Open Power System Data - Frictionless data for electricity system modelling JF - Applied Energy N2 - The quality of electricity system modelling heavily depends on the input data used. Although a lot of data is publicly available, it is often dispersed, tedious to process and partly contains errors. We argue that a central provision of input data for modelling has the character of a public good: it reduces overall societal costs for quantitative energy research as redundant work is avoided, and it improves transparency and reproducibility in electricity system modelling. This paper describes the Open Power System Data platform that aims at realising the efficiency and quality gains of centralised data provision by collecting, checking, processing, aggregating, documenting and publishing data required by most modellers. We conclude that the platform can provide substantial benefits to energy system analysis by raising efficiency of data pre-processing, providing a method for making data pre-processing for energy system modelling traceable, flexible and reproducible and improving the quality of original data published by data providers. Y1 - 2019 U6 - https://doi.org/10.1016/j.apenergy.2018.11.097 VL - 236 SP - 409 ER - TY - JOUR A1 - Ruhnau, Oliver A1 - Hirth, Lion A1 - Praktiknjo, Aaron T1 - Heating with Wind: Economics of heat pumps and variable renewables JF - Energy Economics N2 - With the growth of wind and solar energy in electricity supply, the electrification of space and water heating is becoming a promising decarbonization option. In turn, such electrification may help the power system integration of variable renewables, for two reasons: thermal storage could provide low-cost flexibility, and heat demand is seasonally correlated with wind power. However, temporal fluctuations in heat demand may also imply new challenges for the power system. This study assesses the economic characteristics of electric heat pumps and wind energy and studies their interaction on wholesale electricity markets. Using a numerical electricity market model, we estimate the economic value of wind energy and the economic cost of powering heat pumps. We find that, just as expanding wind energy depresses its €/MWhel value, adopting heat pumps increases their €/MWhel cost. This rise can be mitigated by synergistic effects with wind power, “system-friendly” heat pump technology, and thermal storage. Furthermore, heat pumps raise the wind market value, but this effect vanishes if accounting for the additional wind energy needed to serve the heat pump load. Thermal storage facilitates the system integration of wind power but competes with other flexibility options. For an efficient adoption of heat pumps and thermal storage, we argue that retail tariffs for heat pump customers should reflect their underlying economic cost. Y1 - 2020 U6 - https://doi.org/10.1016/j.eneco.2020.104967 VL - 92 ER - TY - RPRT A1 - Radecke, Julia A1 - Hefele, Joseph A1 - Hirth, Lion T1 - Markets for Local Flexibility in Distribution Networks T2 - EconStor Preprints 204559 Y1 - 2019 UR - http://hdl.handle.net/10419/204559 ER - TY - RPRT A1 - Dertinger, Andrea A1 - Hirth, Lion T1 - The Impact of Power Sector Reforms in Developing Economies T2 - EconStor N2 - Since the 1990s, many developing countries have restructured their electric power industry. Policies such as breaking up, commercializing and privatizing utilities, allowing for independent power producers, installing independent regulators, and introducing competitive wholesale markets were meant to improve the industry’s efficiency and service quality. We exploit more than 30 years of data from over 100 countries to investigate the impact of power sector reforms on efficiency (represented by network losses) and access to electricity (represented by connection rates and residential power consumption). Crucially, reforms are likely to be endogenous with respect to sector performance: a crisis in electricity supply might well trigger reform efforts. We deal with endogeneity using reform activity in neighboring countries as an instrument. Our results suggest that reforms strongly and positively impact electricity access. According to our preferred specification, a full reform program would increase connection rates by 20 percentage points and per capita consumption by 62 percent: these are large effects that are stable across a range of robustness checks. Moreover, the effect of improving access is largest in South Asian countries. In contrast to previous studies, we do not find robust evidence to support the theory that reforms reduce network losses. Y1 - 2019 UR - http://hdl.handle.net/10419/201842 PB - ZBW - Leibniz Information Centre for Economics ET - Preprints 201842 ER - TY - RPRT A1 - Hirth, Lion A1 - Schlecht, Ingmar T1 - Redispatch Markets in Zonal Electricity Markets: Inc-Dec Gaming as a Consequence of Inconsistent Power Market Design (not Market Power) T2 - EconStor Y1 - 2019 UR - http://hdl.handle.net/10419/194292 PB - ZBW – Leibniz Information Centre for Economics ER -