Chair of Energy Economics

In Energy Economics the whole value-added chain, starting with the primary energy generation, energy conversion, transmission as well as distribution and ending with the use of energy is analysed (see the following figure). So, Energy Economics offers a great variety of research possibilities.

In order to analyse such a wide area of research it is necessary to consider approaches from business management and economics as well as from engineering and social sciences.

Research at the chair of Energy Economics focuses on the following 4 strongly interdependent topics:

„Production and investment planning in competitive energy markets”

Energy provision is the main aim of power companies. European power sectors have faced substantial changes in their regulatory and competitive environment. Past and still ongoing market liberalisation efforts reshape the traditionally monopolistic power industry, creating new market structures, enhancing competition between market players and resulting in increased international power exchange volumes. Within such a turbulent environment, reliable projections on the future development of the power sectors under different assumptions, regarding regulatory frameworks and market conditions, are crucial for policy makers and strategic planning chairs of power producers. Especially now power companies face enormous challenges, for example, they have to contend with high uncertainties when making investment decisions.

In this field of research topics like investment decisions in power plants (Fig. 1) and networks as well as demand-side measures, scheduling of power plants, pricing mechanisms and system integration of decentralised energy technologies (e.g. renewable energies) are analysed.

„Energy-intensive production companies“

In production companies energy is used for the production of goods and so represents a basic factor of production according to Gutenberg’s classification. Due to the priority of the production process of the specific products in these companies energy supply is seen to be only a supplementary activity.

In this field of research topics like weak-point analysis in industrial energy supply, inter-firm energy supply concepts and the formulation of standardised load profiles are analysed. In addition, existing approaches of energy oriented production planning and control are enhanced.

„Energy and the environment“

Power industry is inseparably linked to environmental economics due to emissions that are the by-products of the conversion of fossil energy sources. For a long time the reduction of SO₂- and NO_x-emissions was on the top of the environmental agenda, but in the meantime climate protection has come in the centre of environmental discussions. With the increasing awareness of this problem concrete measures and programs for a mitigation of the emissions of greenhouse gases (GHG) are developed. In the Kyoto-Protocol, signed during the third Conference of the Parties (COP3) of the United Nations Framework Convention on Climate Change (UNFCCC), the European countries have set GHG mitigation objectives for the period 2008-2012.

In this field of research such topics as the development of emission reduction strategies, strategies for a more sustainable energy supply, in particular, in upcoming developing countries and their megacities as well as the evaluation of policy measures (e.g. CO₂ emissions trading and the project-based mechanisms Joint Implementation and Clean Development Mechanism) are analysed.

„Development and use of model-based approaches for decision support”

For analysing the abovementioned research questions model-based approaches often seem to be appropriate. In particular, methods based on Operations Research (OR) have shown their applicability for decision support of political decision-makers and power companies.

Therefore, the top-down models, the bottom-up models, process analytical as well as game-theoretical approaches, the system-dynamic models and the flow-sheeting simulation programs (e.g. Aspen Plus) are used. In this context a research project shall be mentioned, in which a new concept for the simulation of electricity markets based on a multi-agent-system is developed ( www.powerace.de).

Link to the Chair