Analysis of the German Electricity Market

Analysis of the German Electricity Market


The German energy turnaround results in many challenging mathematical and economical questions. The strong emphasis on renewable energy leads to high needs of investment in all areas of the energy system like investment in new network facilities or the storage of energy. All these areas are coupled by a energy market design that determines the way of how energy is traded between producers and consumers. The main question in this context is how the energy market should be designed to give the correct investment incentives that pave the way to a successful energy turnaround.
In order to model the market in an appropriate way, different agents like regulated transport system operators or profit maximizing private firms have to be described. This leads to multilevel optimization problems. In addition, all energy forms like electricity or gas have to be transported through corresponding networks leading to – on top of the multilevel model structure – (non)linear mixed-integer optimization problems.
In this interdisciplinary project we analyze the current energy market design of Germany, compare it to the designs of other countries and try to make proposals for improvement. To this end, we study relevant mathematical models of the system under consideration and develop theory and problem-specific algorithms for solving the multilevel mixed-integer (non)linear optimization problems.

People involved

Frauke Liers
Alexander Martin


For further details about this project please contact Martin Schmidt ([at]


This project is part of the Energie Campus Nürnberg. Collaborative researchers in this project are

Prof. Dr. Veronika Grimm (FAU, Chair of Economic Theory)
Prof. Dr. Gregor Zöttl (FAU, Chair of Regulation and Energy Markets)


Veronika Grimm, Alexander Martin, Martin Schmidt, Martin Weibelzahl, Gregor Zöttl: Transmission and Generation Investment in Electricity Markets: The Effects of Market Splitting and Network Fee Regimes. 2015. Preprint
Lars Schewe, Martin Schmidt: The Impact of Physics on Pricing in Energy Networks. 2015. Preprint
Veronika Grimm, Lars Schewe, Martin Schmidt, Gregor Zöttl: Peak-Load Pricing on a Network. 2015. Preprint

Veronika Grimm, Alexander Martin, Martin Weibelzahl, Gregor Zöttl: More Price Zones May Lead to Worse Locational Price Signals. 2015. In Preparation.

Friedrich-Alexander-Universität Erlangen-Nürnberg