The EWI, in collaboration with the Forum for Future Energies, hosted the second “Berlin Science Forum on the Energy Industry.” In keynote presentations and panel discussions, experts addressed the topic of “Integrated Electricity Market Design.”
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Berlin Science Forum on Integrated Electricity Market Design
The ongoing expansion of renewable energy is shaping the development of the German energy system. As the share of weather-dependent generation increases, volatility across the entire system grows, raising questions about the future design of the electricity market. How can the grid integration of renewable energy be efficiently structured, and what regulatory and market-side framework conditions are necessary to unlock the flexibility potential required for this?
Against this backdrop, the Institute for Energy Economics at the University of Cologne (EWI), in collaboration with the Forum for Future Energies, hosted the second “Berlin Science Forum on Energy Economics” at the Berlin office of the State of North Rhine-Westphalia, this time on the topic of “Integrated Electricity Market Design”. The event focused on the grid integration of renewable energy and flexibility, both in the context of security of supply and on the consumption side.
“Facts, Figures, and Data – An Objective Assessment” with keynotes and discussion
The first part of the event addressed the grid integration of renewable energy. Assistant Professor Oliver Ruhnau, a research scientist at the EWI, spoke about grid overcapacity—that is, the oversizing of the installed capacity of wind and solar power plants relative to the grid connection. He discussed how an efficient level of overcapacity could be incentivized through grid connection contributions, how this could save system costs, and what distributional effects and interactions with other elements of electricity market design might result. Ursula Heinen-Esser, President of the German Renewable Energy Federation, then explained the regulation of grid connections and feed-in of renewable energy.
On the topic of flexibility in the context of security of supply, Prof. Karsten Neuhoff, Head of the Climate Policy Department at DIW Berlin, first spoke about its role in connection with a strategic reserve, followed by Dr. Lisa Just, Head of Research Area at EWI, on flexibility in capacity markets. “Batteries can contribute to security of supply and reduce the need for additional firm capacity, such as gas-fired power plants. But this substitution effect diminishes as battery market penetration increases,” explained Lisa Just.
Arne Lilienkamp, Project Lead at EWI, and Dr. Janina Ketterer, Head of German System Change at Octopus Energy Germany gave presentations under the title “Unlocking Flexibility: Flexibility on the Demand Side”. The session focused on creating a regulatory framework for leveraging demand-side flexibility while taking market and grid signals into account.
Bialek-Gregory: “The big picture is missing”
The subsequent panel discussion between Sylwia Bialek-Gregory, Ph.D., Research Director at EWI, and Stefan Lochmüller from the Energy Policy and Committees division at N-ERGIE AG focused, among other things, on the potential for improvement in the integration of the German electricity market design. “In many areas, we have legacy solutions; the design elements are not optimally coordinated with one another,” said Bialek-Gregory. A prime example of this are the interactions between consumers and the grid, as well as generators and grids. “This lack of coordination leads to inefficiencies and increases overall system costs,” she added.
Currently, there are many initiatives to adapt the electricity market design. “These are good and necessary in principle, but they often amount to a patchwork of small measures,” explained Bialek-Gregory. The interactions between the measures are often not yet fully understood. “The big picture is missing.”
The panel discussion was moderated by Ulrike Drachsel, Managing Director of the Forum for Future Energies.
The “Berlin Science Forum on the Energy Industry” is a forum series first organized by the EWI and the Forum for Future Energies in November 2024 on the topic of “Electricity Prices”. The forum is set to take place regularly in the future to address current issues in the increasingly complex energy markets. “We look forward to the upcoming editions of the Berlin Science Forum covering other exciting topics,” said Drachsel, announcing the continuation of this collaboration.
