Business Administration and Economics

Wind Energy and Electricity Markets Research at the Department of Business Administration in Essen focuses on selected sectors of the economy, in particular the energy industry and the health sector.
At the Department’s Chair for Management Science and Energy Economics, two EU-funded projects on the integration of wind energy in European electricity networks and the electricity market were completed in 2009. Professor Christoph Weber and his team coordinated the SUPWIND research project, which continued development of state-of-the-art methods for electricity market modelling with increased wind infeed. These models were then applied as part of the European Wind Integration Study (EWIS) in a cooperation with fifteen European transmission grid operators in order to investigate the development of electricity markets and wind power generation in years to come.
In terms of methodology, this and other research work centres around two basic questions: firstly, how to adequately describe intermittent and only partly predictable quantities such as wind energy infeed; and secondly, taking such uncertainties and the many surrounding technical conditions into account, what are economically optimal decisions. The first question is typically answered by combining methods from econometric time series analysis, mathematical finance modelling of stochastic processes, and scientific description of uncertainties. Stochastic optimisation methods are then used to address the second type of question.
By way of an example, the E2M2s model (European Electricity Market Model – stochastic version) can be used to describe the interdependencies between wind infeed, price formation and the construction of conventional power plants in the European power market.
In terms of outcomes, the projects have shown that integration of increasing amounts of wind power in the European electricity market is possible in principle, at least up to 2015. Reinforcement of European electricity grids, however, brings with it substantial cost savings and therefore better integration of wind power. Several other measures in addition to grid reinforcement may contribute to improved integration of wind energy. Research has been looking into areas such as the construction of additional storage capacities and what is known as overhead line monitoring, which allows increased electricity transmission on power lines when the ambient temperature and wind conditions permit. Yet none of these measures have such a sweeping effect as grid reinforcement, which will be particularly true after 2015, when undisrupted transport of wind power from the North Sea and Baltic coasts to the consumption centres in the middle and south of Germany will only be possible with increased transmission capacities.