Wind power integration and power system flexibility-An empirical analysis of extreme events in Germany under the new negative price regime

In this article, the flexibility of the German power market with respect to the integration of an increasing share of electricity from renewable energy sources was analysed. Flexibility limiting system components, which cause negative prices, are explained and illustrated for the German market. The decision of the European Energy Exchange in Leipzig to allow negative price bids is then explained. The empirical data illustrate the flexibility of conventional generating capacities in Germany from October 2008 to December 2009. Of the 86 h of negative spot prices, 19 h were significantly negative, with prices of at least -100 epsilon/MWh. These extreme hours were analysed in greater detail by the examination of different system components. Thereby, load, wind power infeed and conventional generation by fuel type were observed, as well as the market for negative tertiary reserve, as indicators for market tightness. Although the market situations were found to be severe, under the current conditions, it could have been much worse. In order to enable the market to clear at all times, policy recommendations are provided and long-run implications of an increasing RES-E share on the conventional generation capacity are discussed. The article concludes with an outlook on additional power system flexibility options. (C) 2010 Elsevier Ltd. All rights reserved.