In order to manage the transition towards a sustainable future electricity system, an in-depth understanding of the key technological, economic, environmental and societal drivers for electricity markets is required. Suitable for advanced undergraduate and graduate students, this textbook provides an overview of these drivers and introduces readers to major economic models and empirical evidence for the study of electricity markets and systems. Readers will learn about electricity generation, demand, transport, and storage, as well as the fundamentals of grid and electricity markets in Europe. By introducing them to state-of-the-art models from operations research and economics, the book provides a solid basis for analytical insights and numerical modeling. Furthermore, the book discusses the policy instruments and design choices for electricity market regulation and sustainable power system development, as well as the current challenges for smart energy systems.

Zielsetzung der Arbeit ist die Entwicklung einer Methodik zur quantitativen Analyse der langfristigen Wettbewerbsfähigkeit der Wasserkraft im liberalisierten europäischen Elektrizitätsmarkt. Der methodische Ansatz des entwickelten Modells basiert auf einer mehr-periodigen, gemischt-ganzzahligen linearen Optimierung. Das entwickelte Modell wird exemplarisch auf das schweizerische Energieversorgungssystem angewendet. Aufgrund der Internationalisierung der europäischen Energiemärkte werden europäische Anrainerstaaten mitbetrachtet, um Auswirkungen der interregionalen Stromaustauschoptionen adäquat zu berücksichtigen. Die Arbeit liefert eine fundierte Entscheidungsgrundlage für die Erneuerung, den Aus- und Rückbau von Wasserkraftwerken. Des Weiteren stellt die entwickelte Methodik Preisinformationen für Elektrizität in einem langfristigen Betrachtungshorizont bereit.

In this paper, we analyse if experiencing a supply interruption affects the valuation of security of supply of electricity. To do so, we utilised a blackout in Munich, Germany, in November 2012 as a natural experiment by conducting a Contingent Valuation survey around two months after the event. The characteristics of the supply interruption allow to distinguish between households that were affected by the blackout and those who were not. This provides the opportunity to compare the willingness to pay (WTP) for avoiding and the willingness to accept (WTA) for enduring a supply interruption between affected and non-affected Munich households. Using the WTP measure, we find that experiencing the outage event increased the valuation of supply security by over 60 percent. Furthermore, our results show that power outage experience can increase the perceived relevance of the policy objective "security" at the expense of the objective "environmental sustainability". This implies that maintaining the level of supply security should be a priority energy policy objective to support the acceptance of the transition to a renewable based electricity system.

Within flow-based market coupling, the EU's preferred method for calculating cross-border trading capacities, recent regulatory changes stipulate minimum trading capacities, so-called minRAMs which have to be provided to electricity markets. Effectively, high predicted utilization levels of considered electricity grid elements have to be reduced to reserve a minimum of the elements' capacities for cross-zonal trading. This analysis investigates if the adjustments made to meet this criterion, in the form of augmented trading domains, lead to higher amounts of curative congestion management. To quantify the effect of increasing minRAMs on overall welfare, the markets and grids of Central Western Europe are analyzed during two representative weeks of 2016. The results show the increasing market coupling welfare is more than offset by rising congestion management costs, leading to net welfare losses. In the best case, the generation plus congestion management costs within Central Western Europe rise by 7.25% when increasing the minRAMs from the current 20% to 45% and a minRAM of 70% is 6.28% more expensive compared to a minRAM of 20%. The analysis derives policy recommendations for implementing the minRAM stipulation, with a particular focus on a cost-minimizing selection of generation shift keys, in general as well as situation-dependent terms.

This paper, which examines the impacts of phasing out nuclear power in Germany, is the first to include an analysis of energy supply security and critical line flows in both the German and Central European electricity networks. The technical-economic model of the European electricity market, ELMOD, is used to simulate alternative power plant dispatch, imports, exports, and network use for a representative winter day. The results suggest that the shutdown of Germany's nuclear plants will result in higher net imports, especially from the Netherlands, Austria, and Poland, and that electricity generation from fossil fuels will increase slightly in Germany and in Central Europe. We find that no additional imports will come from nuclear plants since they are already fully utilized in the merit order, and that electricity prices will rise on average by a few Euros per MWh. We conclude that closing the seven nuclear power plants within the government's moratorium will cause no significant supply security issues or network constraints and an eventual full phase-out seem to be possible due to the completion of several new conventional power plants now under construction. Finally, we suggest that a nuclear phase-out in Germany within the next 3-7 years will not undermine security of supply and network stability in Germany and Central Europe.

In Europe, the ongoing renewable expansion and delays in the planned grid extension have intensified the discussion about an adequate electricity market design. Against this background, we jointly apply an agent-based electricity market model and an optimal power flow model to investigate the long-term impacts of splitting the German market area into two price zone. Our approach allows capturing long-term investment and short-term market behavior under imperfect information. We find strong impacts of a German market splitting on electricity prices, expansion planning of generators and required congestion management. While the congestion volumes decrease significantly under a market split in the short term, the optimal zonal configuration for 2020 becomes outdated over time due to dynamic effects like grid extension, renewable expansion and new power plant investments. Policymakers and regulators should therefore regularly re-assess bidding zone configurations. Yet, this stands in contrast to the major objective of price zones to create stable locational investment incentives.