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WiSo researchers received GEE Best Paper Award

At this year’s International Ruhr Energy Conference (INREC) in Essen, the paper “Uncertain bidding zone configurations: the role of expectations for transmission and generation capacity expansion” by Mirjam Ambrosius, Dr. Jonas Egerer, Prof. Dr. Veronika Grimm from the Chair of Economic Theory and Energy Campus Nuremberg, and Dr. Harry van der Weijde from University of Edinburgh received the GEE Best Paper Award.

In this project, FAU researchers examine the influence of regulatory uncertainties on investment decisions in the electricity market. In particular, the uncertainty about potential changes in price zones of an electricity market, which have been discussed Europe-wide for some time, is examined.

Using a multi-level optimization model, the researchers can make statements about key market outcomes such as investments in generation capacity, grid expansion, as well as welfare and distribution effects. This shows, among other things, that even a small degree of uncertainty about switching to better regional price zones can have a positive effect on decisions. Due to these anticipatory effects, welfare gains from the actual adjustment of price zones may be lower than described in the literature.

The full article is available here as part of the “Cambridge Working Papers in Economics” series.