Abrell, Jan and Weigt, Hannes (2010): Combining Energy Networks. Published in: Electricity Markets Working Papers No. WPEM38

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Abstract
Electricity markets rely on other upstream energy markets like oil, gas, and coal to provide the necessary fuel for generation. As both the electricity market and those upstream markets rely on networks, congestion on one market may lead to changes on another. In this paper we analyze the interaction of the natural gas network with the electricity network applying a partial equilibrium approach. The model is applied to a stylized representation of the European energy markets. We apply the model to two cases: first the impact of a supply reduction of natural gas on both markets by cutting imports from Russia, and second, the impact of the introduction of an emission restriction on electricity generation. Since natural gas can be an input for electricity generation, gas price level changes alter the generation dispatch. However, the network character of both markets leads to further effects that are not obvious on first sight. Congestion between markets and particular effects due to loop flows in electricity markets can lead to price and quantity effects in markets far away from the initial cause of market changes.
Item Type:  MPRA Paper 

Original Title:  Combining Energy Networks 
Language:  English 
Keywords:  Electricity network; Natural gas network; Europe; MCP 
Subjects:  L  Industrial Organization > L9  Industry Studies: Transportation and Utilities > L94  Electric Utilities L  Industrial Organization > L9  Industry Studies: Transportation and Utilities > L95  Gas Utilities ; Pipelines ; Water Utilities 
Item ID:  65504 
Depositing User:  Hannes Weigt 
Date Deposited:  10. Jul 2015 04:09 
Last Modified:  10. Jul 2015 04:17 
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URI:  https://mpra.ub.unimuenchen.de/id/eprint/65504 