Research - 07.11.2013 - 00:00 

Producing cost-effective power

The iorcf-HSG and the power generator TransnetBW are developing new computation models for cost-effective power production from renewable energies. The research project is scrutinising the expensive compensation for forecasting errors.


7 November 2013. Model-based marketing strategies that take into account potential fluctuations of forecasts in advance are intended to help cut the costs of the integration of renewable energies. The project is being conducted by the Institute for Operations Research and Computational Finance of the University of St.Gallen and by the Energy Market Division of TransnetBW GmbH. TransnetBW GmbH operates the transmission system in Baden-Württemberg. Its legal function is to guarantee system security at all times. 

Insights into marketing mechanisms
In the course of this research project, the University of St.Gallen wants to gain new and in-depth insights into marketing mechanisms. “In terms of science, I expect the most important findings of our cooperation to be in the quantification of the benefit of market coupling in intra-day trade, on the one hand, and on the other hand in the description of the volatility structure of prices for intra-day products, which I consider to be significant cost-pushers for the integration of renewable energies,” said Prof. Dr. Karl Frauendorfer, Director of the Institute for Operations Research and Computational Finance.

Cross-border power market
In so-called market coupling, the power transmission capacities at the borders of the European countries involved are put to optimal use, which enables the cross-border power market to become efficient. “The integration of the increasing proportion of production from renewable energies is confronting us as a transmission grid operator with great challenges. We are countering the accompanying increase in costs, particularly in intra-day trade, by continually optimising our computation models and processes. This is where we hope that the joint research project with the University of St.Gallen will yield new solutions that contribute towards a further moderation of the cost increase,” said Rainer Joswig, CEO of TransnetBW GmbH.

Picture: Photocase / Jarts

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