About Bremen Energy Research 

 

Jacobs University Bremen is a young, interdisciplinary and international private university aiming at excellence in research and education.  Bremen Energy Research is a working group at Jacobs University dealing with economic issues of energy policy. Energy policy aims to ensure uninterrupted supply of energy (security), at affordable prices (competitiveness), which contributes to EU’s wider social and climate goals (sustainability). Within this EU energy policy triangle, our core competence is on “competitiveness”: delivering energy in a cost-effective and economically efficient way. Competitiveness covers primarily debates surrounding liberalization, market design, competition policy, and network regulation. Based on the interdisciplinary competences of the team, our common research approach is economics. Focusing on applied research of energy supply, we address real-world problems with academic tools.  While doing so, we cooperate with academic institutions, government offices, industry representatives and consultants. Currently our main research areas are 

  • The future of price-based network regulation against the background of high investment needs,

  • Governance structure for smart grids,

  • Contracts and tariff structure as a means for coordination of network usage and development,

  • Capacity mechanisms and the European Internal Market for Energy.

 

A selection of news and downloads

 

January 11, 2017

Joint study of Jacobs University and Polynomics on the Malmquist Index as a means to calculate the general X-Factor for electricity distribution companies.

In German: "Die Ermittlung des technologischen Fortschritts anhand von Unternehmensdaten – Der Einsatz der Malmquist-Methode im deutschen Regulierungsrahmen"

In a joint research study, prepared for the German electricity distribution company NetzeBW, Polynomics and Jacobs University Bremen analyse the use of the Malmquist Index to calculate the general X-Factor (Xgen) for electricity distribution companies in the German regulatory framework. The Xgen needs to be calculated for the next regulatory period starting 2019; currently, the debate is about the method of calculation: Törnquist or Malmquist? In contrast to the Törnquist methodology which has been used by the federal regulator Bundesnetzagentur (BNetzA) so far, the Malmquist Index applies benchmarking techniques to calculate the technical frontier shift from firm-level data. This avoids the aggregation and consistency problems of external data bases. The analysis shows that the strength of a cost-based Malmquist Index is that both components of Xgen – the changes in total factor productivity (ΔTFP) and input prices (Δw) – can be calculated jointly as a nominal efficient cost change. However, regulators often only have information on total cost (TOTEX) instead of separate input quantity and price data. In such a case only a TOTEX Malmquist Index can be applied, which may lead to distortions in some of the price scenarios analysed. Distortions arise If either allocative inefficiency of the firms in the sample changes over time or there are different groups of companies facing different input price changes.  

The final report of the study (in German) can be downloaded here.            

 

June 30, 2015

BER study on the general X-Factor for electricity distribution companies in the face of energy transition.

"Die 3. Periode ARegV: Xgen und die Energiewende"

The general X-Factor (Xgen) as part of price-based regulation aims to capture total factor productivity (TFP) of the network business and ensure a fair distribution of efficiency gains between network companies and consumers.

The purpose of the research project was to identify and discuss the main challenges for the German regulator BNetzA of calculating TFP for the forthcoming third regulatory period starting in 2019.

The main conclusion is that the previous methodology and parameters may have worked fairly well in the past, but do not appear to provide adequate productivity indicators for the future. Given the fundamental structural changes of the energy transition, one should reconsider the “outputs” based on which the networks’ TFP is calculated.      

 

March 30, 2015

Joint study of Jacobs University Bremen and CRIEPI, Tokyo

"Distribution Planning and Pricing in View of Increasing Shares of Intermittent, Renewable Energy in Germany and Japan"

The purpose of this research is to evaluate the impact of increasing shares of intermittent, renewable energy in distribution grids. Our research mainly relies on in-depth interviews with sector-experts from German utilities. We discuss both effects in network planning and challenges for network pricing. Overall, we have two main conclusions. First, the integration in network planning is well under way in Germany and Japan, but could easily be very costly. Second, changes in network pricing, such as a shift towards base charges, contributions from generators and/or differentiated charges solve most of the problems identified. 

The results are now available as Bremen Energy Working Paper No. 20.

 

September 3, 2014

Joint research project on future decentralized power networks

"Collective non-linear dynamics of power networks (ConDyNet)"

The project analyzes the dynamics in newly arising complex, decentralized power networks. It is part of the initiative "futureproof networks" funded by the ministry for economic affairs and energy, and the ministry for education and research over a timespan of 3 years. Together with Potsdam Institute for Climate Impact Research, Max Planck Institute for Dynamics and Sefl-Organization, Frankfurt Institute for Advanced Studies and Jülich Research Center, we will model and simulate optimization options, critical network states and risk scenarios. The focus of Bremen Energy Research herein will be on the economic framework for such complex, decentralized networks; deploying agent-based computational economics to asses the influence of innovative pricing scemes on their operation and development.

 

July 10, 2014

dena Smart Meter Study

"Implementation of Smart Meters in Germany" 

The dena Smart Meter Study analyses the parameters influencing efficient and operative structuring of the rollout of intelligent meters and intelligent metering systems in Germany. In cooperation with eleven German electricity distribution grid operators or their affiliated metering station companies, this project focuses on expected specific costs and potential grid benefits depending on varying grid structures of the electricity distribution grid operators (micro-economic perspective). The authors from BER conducted the regulatory part of the study which critically assesses the financeability of the rollout, and analyses necessary regulatory adjustments as well as economic impacts on competition and consumers' interests.

The final report of the dena Smart Meter Study is now available for download (in German language) on the website of Deutsche Energie-Agentur (dena).

 

March 31, 2014

Joint study of Jacobs University Bremen and CRIEPI, Tokyo

"Unbundling of electricity transmission system operators in Germany – An experience report"

The purpose of this research is to evaluate the impact of vertical unbundling on German electric utilities. Our research mainly relies on in-depth interviews with sector-experts from the German utilities. We will discuss both short-term changes and the long-term impact on competition in the electricity market as well as the impact on costs and security of supply. Overall, we have two main conclusions. First, the major step in the unbundling process is from “lean legal unbundling” to “fat legal unbundling”; additional steps beyond that are small, both in benefits and in costs. Second, the benefits of unbundling in terms of increased competition do not come for free: unbundling is costly and it is important to balance cost and benefits in the reform process. 

The results are now available as Bremen Energy Working Papers No. 16.

 

January 2014 

Joint Study of Bremer Energie Institut and WU Wien 

"The Institutional Framework for Smart Grids in Austria" 

The aim of the project was to identify the key areas within the institutional framework of the electricity sector in Austria where adaptation is required to support the development of smart grids. To address these adjustment requirements we analysed best practises in other countries. Based on these findings we defined 6 recommendations for the institutional framework in Austria. The recommendations address the following issues: Governance in Smart Systems (information management), Network Tariffs (flexible pricing), Efficient investment, IT infrastructure for data transport from smart meters, data management and non-discriminatory data access.  

The results are now available at BMVIT Schriftenreihe nachhaltig wirtschaften 7/2014.

 

October 13, 2013

Jacobs University Study

"Prices and contracts in the German wholesale gas market"

Over the past few months, Jacobs researches belonging to the BER group performed a study where gas-purchasing strategies of German utility companies were analyzed. Within this study, 250 German gas utilities were addressed with a questionnaire about their gas purchasing strategies, historical price data from the last six years were analyzed, as well as interviews with gas market brokers and market price publishing institutions were performed.

The study concludes that following the liberalization, gas utilities in Germany increasingly rely on the direct purchases at gas markets and on the gas market linked supply contracts. This development then provides utilities with a competitive advantage but also introduces them to risks unknown from the traditional sector organization.

The study was introduced to public in autumn 2013 and can be downloaded using the following link: Preis- und Vertragssituation im deutschen Gasmarkt.