Joint project: EOM-Plus – Analysis of the short and medium-term effects of market-based bottleneck instruments as a regional and temporary supplement to the existing energy-only electricity market design, sub-project: Transmission system level (2019-2022)Funded by the Federal Ministry for Economic Affairs and Energy
Veronika Grimm and Jonas Egerer
In the joint project “EOM-Plus”, a team led by Prof. Veronika Grimm and Dr. Jonas Egerer with colleagues from TH Ingolstadt and the Stiftung Umweltenergierecht (Würzburg) will research the short- and medium-term effects of market-based bottleneck instruments as a regional and temporary supplement to the existing energy-only electricity market design over the next three years as part of the BMWi’s 7th Energy Research Programme. The project aims to conceptually develop and analyse various forms of these so-called “smart markets” and their respective embedding in the current market design.
The EOM-Plus project addresses central energy policy issues with a focus on the short- and medium-term effects of regional congestion markets on the cost structures within these smart markets, as well as on the potential for cost savings in the overall system compared with the existing mechanisms of congestion management. Different scenarios regarding renewable energy expansion and grid expansion are considered. The scientists are particularly interested in the regional steering effect of smart markets for the operation of plants and for investments in climate-friendly, flexible generation and storage capacities. The results will also shed light on the need for grid expansion under different framework conditions. Another focus will be on the problem of strategic bidding behaviour of players in the smart market or between different submarkets and necessary adjustments to the regulatory framework.
“The Role of Social Identity for Learning in Networks” (since 2019)Funded by the German Science Foundation (DFG)
Learning through social networks today plays a key role in individuals’, firms’, and governments’ decision-making processes. The “social” aspect of learning refers to the fact that learning is accomplished by observing other’s behaviour or by communication with others. Different information sources will typically differ in terms of how close their social identity is to that of the “learner”. It is thus vital to the understanding of the social learning process whether and how the social identity of an information source affects the perception of credibility of information, the willingness to change one’s expectations based on this information and ultimately how those factors affect learning dynamics in networks. The aim of the project is to identify the effect of social identity on learning in networks and to understand how social identity is used in social learning. Does it improve efficiency, in particular increase the speed of learning, or does it lead to distortions and failure to learn? In laboratory experiments the researchers will study how different social network structures influence the dynamics of social learning and discriminatory behaviour. A further question addressed is how social identity affects the formation of social networks and thus the source of information that people consult.
“H2.B – Zentrum Wasserstoff. Bayern” (since 2019)Funded by the Bavarian State Government
Veronika Grimm and Peter Wasserscheid
Hydrogen will play an important role in a climate-neutral industrial society of the future. Due to its high energy density and good storage capacity, hydrogen is predestined to close the gap between volatile renewable energies and energy-intensive applications in the fields of electricity and heat supply, industry and mobility. The diverse applications hold great potential for the industrial production of key components of a future hydrogen economy. Bavaria has identified this potential and created the basis for a sustainable hydrogen economy in research and industry. The Zentrum Wasserstoff. Bayern (H2.B) will connect the numerous players from industry, science and politics and help to bring hydrogen to large-scale use – as a central element of global energy transition. More information
“B08: Multilevel mixed-integer nonlinear optimization for gas markets” (2018-2022)Funded by the German Science Foundation (DFG) as part of the project “SFB Transregio 154”
Veronika Grimm and Martin Schmidt
The main goal of this project is the development of mathematical methods for the solution of multilevel, mixed-integer, and nonlinear optimization models for gas markets. To this end, the focus is on a genuine four-level model of the entry-exit system that can be reformulated as a Bilevel model. The mathematical and algorithmic insights shall then be used to characterize market solutions in the entry-exit system and to compare them to system optima. Particular attention is paid to booking prices for entry or exit capacity. More information
“Regionalkomponenten bei der EE-Vergütung” (2017)Report for the Monopolies Commission for the preparation of the 77th special report Energie2017
Veronika Grimm, Gregor Zöttl, and Christian Sölch
In the report for the Monopolies Commission for the preparation of the 77th special report „Energie 2017: Avoid patchwork, targeted action required“, the EnCN electricity market model is used to analyze the long-run effects of the electricity market design on investment incentives in network and generation capacity. The analysis focuses on different scenarios for the regional allocation of renewable generation facilities. The report shows that consumer-orientated, decentralized locations result in a higher system efficiency compared to the currently pursued locations which are mainly based on the renewable energy output. Regionally differentiated promotion of RES may enable consumer-orientated locations. The Monopolies Commission acts on the suggestions in its special report and formulates appropriate recommendations for the adjustment of the current RES promotion system.Report „Regionalkomponenten bei der EE-Vergütung“ (German) Special report Energie2017
“Energie Campus Nürnberg”, partial project “Energy Market Design (EMD)” (2017 – 2021)Funded by the Bavarian State Government
Veronika Grimm, Roland Ismer, Frauke Liers, Alexander Martin, Lars Schewe, Martin Schmidt, and Gregor Zöttl
In the project “Energy Markt Design” within EnCN2 a team of researchers from economics, mathematics, and law analyses the economic and regulatory environment for the transformation of the energy system. The main objectives are to enhance the methods in energy market modeling and to contribute with well-grounded analyses to the policy discourse in Germany and Europe. For the electricity market, the focus is on the steering effect of market designs on regulated transmission expansion and private investments, as well as on the identification of frameworks at the distribution level that provide regional stakeholders with business models for the provision of flexibility measures. In order to address these complex issues, mathematical techniques are developed within the project that allow for solving the respective models. Another key research topic results from the advancing sector coupling in energy markets. Within EMD, gas market models, that are developed within DFG Transregio 154 (Simulation and Optimization of Gas Networks) in cooperation with project partners, are applied to evaluate the European gas market design. The long-term objective of the research group is an integrated assessment of the electricity and gas market design and their combined effects on investment decisions. More Information/Video
“Energie Campus Nürnberg”, partial project “Storage B – Efficient hydrogen logistics” (2017 – 2021)Funded by the Bavarian State Government
Veronika Grimm and Gregor Zöttl
Decarbonisation of the mobility sector is an important factor in the fight against climate change. Battery-powered electric vehicles can play an important role in this process. However, special challenges may arise in the fields of range, charging infrastructure, grid stability and heavy goods vehicles. In the short to medium term, it can therefore be assumed that battery electric vehicles will be supplemented by the use of synthetic fuels such as hydrogen. Efficient logistics is an elementary component of hydrogen mobility, especially due to the difficult handling and low volumetric energy density of the gas. In the research focus “Efficient Hydrogen Logistics” of the partial project “Storage B” of EnCN2, an interdisciplinary team of engineers and economists is working on the future of hydrogen mobility. So-called LOHC (Liquid Organic Hydrogen Carrier) offer an innovative alternative for hydrogen logistic to compressed hydrogen, cryogenic hydrogen or on-site production by electrolysis. The hydrogen molecules can be chemically bound to the liquid LOHC by catalytic hydrogenation and then stored and transported as a liquid without loss. The hydrogen is released at the filling station and the LOHC can be used for reloading. Mathematical models are used to investigate and classify the various technologies and mobility concepts in terms of their economic efficiency and their influence on the energy system.
“Elite Master Program: Advanced Signal Processing & Communications Engineering” (2016 – 2020)Funded by the Elite Network of Bavaria
Georg Fischer, Reinhard German, Wolfgang Gerstacker, Veronika Grimm, Emanuël Habets, Albert Heuberger, André Kaup, Walter Kellermann, Frauke Liers, Andreas Maier, Meinard Müller, Ralf Mueller, Robert Schober, Juergen Teich, and Robert Weigel
Communication networks of the future will have a modular, decentralized structure in order to enhance efficiency and flexibility of applications. In order to develop suitable algorithms, game theory is of crucial importance. The course „Game Theory with Applications to Information Engineering“ which is offered within the framework of the elite master program „Advanced Signal Processing and Communications Engineering“ is an introduction to the fundamentals of game theory and mechanism design and their applications to information engineering. The first part of the lecture will be an introduction to non-cooperative game theory with complete and incomplete information as well as central solution concepts. Motivations are drawn from topics in information engineering and networked systems (e.g. incentive-compatible/dynamic resource allocation in networks, distributed control of wireline and wireless communication networks, multi-agent systems, pricing and investment decisions in the Internet). In a second part, fundamentals of auction theory as well as Mechanism Design will be covered and put into context with information engineering. Also social and economic contexts will be covered in order to put the engineering applications into a broader perspective.
“Welfare optimal nominations in gas networks and associated equilibria” (2016 – 2018)Funded by the German Science Foundation (DFG) as part of the project “SFB Transregio 154”
Veronika Grimm, Lars Schewe, Martin Schmidt, and Gregor Zöttl
The goal of this project is the analysis of the relation between (i) the equilibria of simple models of competitive natural gas markets, using complementarity problems for modeling the behavior of different players, and (ii) the solution of corresponding single-level welfare maximization problems. The understanding of this fundamental relation is a prerequisite for an analysis of the current entry-exit gas market design in Europe. Similar questions have been studied in detail in the context of electricity market modeling in the past. For natural gas markets, however, the addressed questions are much more complex and not yet well understood for adequate models of gas physics. The reasons for the high level of complexity is twofold: First, gas flow through pipeline systems is inherently nonconvex due to gas physics. This renders classical first-order optimality conditions possibly insufficient. Second, the operation of gas transport networks comprises the control of active network devices like (control) valves or compressors. These devices introduce binary aspects and thus a further type of non-convexity to the models of the underlying equilibrium problems. As a result of the project we will obtain a first reference model that combines gas physics and a market analysis in a well-understood way. This will lay the ground for multilevel models of entry-exit natural gas markets that account for network characteristics. Beyond that, our results will enhance the understanding of binary equilibrium problems. More information
“Dezentralität und zellulare Optimierung – Auswirkungen auf den Netzausbaubedarf” (2016)Report for the N-Ergie Aktiengesellschaft
Veronika Grimm, Gregor Zöttl, and Prognos AG
Facing the current debate about the energy transition, in this project we investigate flexible demand options as well as changed market designs and conditions as an alternative to network expansion. Further, the optimal technology mix as well as locational choice of renewable energy generation will be determined endogenously. This project will be the basis to enhance the process of network expansion systematically and to include approaches and flexibility options which have been neglected so far. More information
“Experimental Validation of Indicators of Manager Behavior in Business Surveys” (2015-2018)Funded by the Federal Employment Agency
The aim of the project is to analyze connections between manager behavior and firm level variables. The first step is the identification of suitable behavioral indicators in questionnaires that will be validated in controlled laboratory experiments. The experiments are meant to examine and evaluate fundamental relationships between different indicators and economically relevant decision making. The project points towards providing the basic elements to collect the identified behavioral indicators by means of short questions or simply decisions within questionnaires. The project is conducted in close cooperation between the Chair of Economic Theory by Prof. Dr. Grimm and the Institute for Employment Research (IAB) in especially with Prof. Dr. Bellmann and Dr. Mario Bossler.
“Flexible Verbraucher im Deutschen Strommarkt” (2015)Funded by the ThyssenKrupp Aktiengesellschaft
Veronika Grimm and Gregor Zöttl
In this research project, we analyze investment incentives for flexible manufacturing facilities within the energy market system. We propose a multi-stage equilibrium model which incorporates generation capacity investment, network expansion and redispatch, and include enhancements regarding a flexible production approach. The model allows to investigate incentives for flexible production as well as locational choices and the impact of flexible energy demand on the energy market as a whole. In particular, we explore the profitability of flexible production units for different shares of flexible energy consumers in the electricity market. Furthermore, we examine from which point on flexible production units will have a considerable influence on energy price development and the extent to which price fluctuations will be mitigated by flexible consumption.
“Regionale Preiskomponenten im Strommarkt” (2015)Report for the Monopolies Commission for the preparation of the 71st special report Energie2015
Veronika Grimm, Gregor Zöttl, Bastian Rückl, and Christian Sölch
In the report for the Monopolies Commission for the preparation of the 71st special report „Energie 2015: A competitive market design for the Energiewende”, the EnCN electricity market model is used to compare different market designs with respect to their effects on investment incentives for generation capacity and network expansion. The analysis focuses on regionally differentiated network fees, price zones, curtailment of renewable generation, as well as the anticipation of redispatch measures for the network expansion planning process. Overall, the calculations show that the required network expansion considerably depends on the regulatory framework of the electricity market.Report „Regionale Preiskomponenten im Strommarkt“ (German) Special report Energie2015
“Sustainable Business Models in Energy Markets: Perspectives for the Implementation of Smart Energy Systems” (2014 – 2015)Funded by the FAU Emerging Fields Initiative
Nadine Gatzert, Wolfgang Arlt, Christoph Brabec, Andreas Fürst, Veronika Grimm , Alexander Martin, Kai-Ingo Voigt, and Gregor Zöttl
The liberalization of electricity markets and the increasing advancement of renewable energy sources pose important new challenges and requirements for our energy system with regard to grid expansion, energy production, transmission, distribution, and innovative storage systems. A successful transformation into a smart energy system thereby crucially depends on adequate investment incentives and the attractiveness of the business models of involved stakeholders. The purpose of the research project “Sustainable Business Models in Energy Markets: Perspectives for the Implementation of Smart Energy Systems” is to provide a comprehensive analysis of the energy system, including the specific economic incentives and business models of all relevant stakeholders, the institutional environment and the technological perspectives. The aim of the project is to develop new and urgently needed insight into the interaction between business models and regulation while taking into account the technological framework, and to allow a more informed discussion and advice regarding political and regulatory frameworks to ensure a successful transition towards a smart energy system. More information
“SWARM: Evaluation eines Smart Grid-Feldexperiments” (2014-2015)Funded by the N-Ergie Aktiengesellschaft, Nürnberg
Within the cooperative project SWARM between the N-ERGIE AG and the Energy Campus Nuremberg (EnCN), the chair of economic theory deals with investment incentives in innovative energy storage systems of private households and the influence of these storages on the supply grid. Further, we investigate the economic advantages they provide to supply system operators or households. The overall goal of the research activities within the SWARM project is to gain knowledge about connected distributed energy storages (swarm storage) running as one virtual electricity storage.More information
“International Graduate School: Evidence Based Economics” (2013 – 2020)Funded by the Elite Network of Bavaria
Davide Cantoni, Florian Englmaier, Veronika Grimm, Martin Kocher, Andreas Roider, Klaus Schmidt, Uwe Sunde, and Joachim Winter
The aim of the graduate program “Evidence Based Economics” (EBE) is to provide doctoral students with the diverse methodological skills required to perform innovative, state-of-the art economics research within the EBE research agenda, and to apply these skills to important real-world problems. The ultimate goal is to train doctoral students so that they can work at the frontier of theory-guided, evidence-based economics.More information
“Energie Campus Nürnberg”, partial project “ECONOMY” (2012 – 2017)Funded by the Bavarian government
The general framework of energy trade, the decisions concerning regulatory interventions and the deployment of climate-policy instruments demonstrably affect energy prices, investment incentives and the success of innovations. This project is aimed at exploring the impact of market designs and regulation on the said decisive economic factors. The project group mainly focuses on the effects of political decisions regarding the economy and climate on the composition of power plant parks and the long-term opportunities and risks different technologies have to offer. One of the central points is the percentage of renewable energy that can be attained from power generation in the long term. The work methods applied by the project group are a combination of theoretical, empirical and experimental approaches. More information
“Solarfabrik der Zukunft: Smart Grid Solar”, partial project “Implementierung im Marktumfeld” (2012 – 2016)Funded by the Bavarian government and the EU (efre)
Since the Energy Market Liberalization, all the various decisions regarding the optimal energy supply in Germany are no longer made by fully integrated power supply companies. Instead, decisions are made by different market participants in a decentralized way. Beyond the economical optimization of the interaction between grid, suppliers, storages and consumers, a key question is, to what extent the current market design coupled with policy control mechanisms (e.g. the EEG regulations) actually reaches the implementation of the optimal system via the various decisions of all market participants. The core of the economic analysis evaluates the implementation of a smart grid system considering all relevant market participants within different political frameworks in a quantitative way. Comparing the optimal solutions derived by the work package optimization and simulation enables an identification of the necessary changes in the market design and the legal framework. More information
“Experimental studies on the impact of collective bargaining on the gender wage gap” with Gesine Stephan (2012 – 2015)Funded by the Federal Ministry of Family Affairs, Senior Citizens, Women and Youth
Veronika Grimm und Gesine Stephan
Compared to men the earnings of women in Europe are still significantly lower than of men. With identical qualifications and occupations female workers in Germany earn on average 8% less than their male counterparts (adjusted wage gap). The difference in the middle income is about 23% (unadjusted wage gap), if qualifications and occupations are not regarded. This huge difference is mainly due to the fact that women are much more often employed in jobs at the lower end of the wage distribution and that they have longer and more frequent family related employment interruptions than men. Until now no lasting improvements could be achieved in collective bargaining for occupations, which are often done by women. According to the German Minister for Family Affairs Kristina Schröder “we need a debate about what role a fair chance and fair pay for women actually play in collective bargaining. Who wants to decrease the income gap between men and women, has to look to the causes of discrimination against women in the working world” (Press release from 03-22-2012). To this debate, this project attempts to contribute. By means of economic experiments we try to get insights into the effects that collective bargaining has on the wage gap, and how an increase of transparency could affect the extent of such effects. Collective bargaining relates to any situation in which representatives of a group deal on wages for this group; collective bargaining between unions and employers associations is the most important variant. More Information
“Trust in Character, Capability and Institutions” (2012-2014)Funded by the GfK Association
In this project we conducted an experimental study among European citizens regarding cross-cultural perceptions related to trust in two dimensions: volunteerism and honesty. We used representative samples from five major economies of the Euro area: France, Germany, Italy, the Netherlands, and Spain. We find that European citizens rely on nationality to infer behavior. Assessments of behavior show a north/south pattern: participants from northern countries are perceived to be more honest and to provide more effort in a volunteering game than participants from southern countries. Actual behavior is, however, not always in line with these assessments. Assessments of honesty show strong evidence of social projection: Participants expect other European citizens to be less honest if they are culturally closer to themselves. Assessments of volunteerism instead show that both northern and southern Europeans expect higher performance in northern than in southern European countries.Part of the research has been published in the European Economic Review.
“Taxation, Social Norms, and Compliance: Lessons for Institution Design” (2012 – 2013)Funded by the FAU Emerging Fields Initiative
Veronika Grimm, Martin Abraham, Thiess Büttner, Roland Ismer, Markus Krajewski, Frieder Lang, Christian Maihöfner, Johannes Rincke, Wolfram Scheffler, Stefan Schwab, and Matthias Wrede
The goal of the project ‘Taxation, Social Norms, and Compliance: Lessons for Institution Design’ is to foster research on individual and social determinants of tax compliance. In particular, the project aims to investigate the role institutions and social and cultural norms play for tax compliance. With regard to formal institutions, the project considers the design of tax systems as well the role of tax administration and of tax accounting. Special attention is paid to social and cultural norms, an aspect which is crucial given the great impact these have on fairness and on the individual’s perception of other taxpayers’ behaviour. Finally, the project also includes several sub-projects that focus on behavioural economics, exploring the preferences and the decision behaviour of individual taxpayers.
“Bio Objects Bio Subjects: Exploring the Interface of Science, Technology and Society” (2012 – 2013)Funded by the FAU Emerging Fields Initiative
Peter Dabrock, Frank Adloff, Rainer Buchholz, Oliver Friedrich, Veronika Grimm, Kay Kirchmann, Antje Kley, André Reis, Uwe Sonnewald, and Beate Winner
Innovations in biotechnology and the life sciences do not only yield great progress in various areas of scientific and technological research and thus also drive economic development, but they also dynamically chart the fundamental relationship between nature, technology, and society. In the future bio-objects will take a key position in dynamic, knowledge-based societies and economies that far exceeds their current importance. They subvert established categories, thereby leaving the realm of the purely material and gaining a certain autonomy and independence from the contexts of their origin and use. This project aims to identify bio-objects as a driving factor for biotechnological developments, to chart their multidimensionality and to examine their effects on agents and society.
“Die Entstehung von Reputation in Wirtschaftsbeziehungen” (2010 – 2012)Funded by the German Science Foundation (DFG)
Veronika Grimm and Martin Abraham
The project focuses on the question how reputation evolves in economic transactions. Oftentimes, business partners cannot rely on their own experience with their counterpart. Thus, the reputation of business partners plays a crucial role in many markets. While the effect of reputation has been the focus of many studies within this field of research, the present investigates the formation of reputation both theoretically and empirically. We are particularly interested in reputation that evolves in the direct interaction between business partners while institution-based reputation mechanisms (e.g. formal rankings on online platforms or media coverage) are deliberately excluded. On the basis of game theory and laboratory experiment we investigate the conditions that foster the formation of reputation and the circumstances that rather prevent their evolvement. In a second step, the results from the laboratory experiments will be validated with field data.
Policy Reports & Consulting
- Energiepreise und effiziente Klimapolitik. Report by the Board of Academic Advisors to the Federal Ministry for Economic Affairs and Energy (2019) Report (German)
- Eine marktorientierte Verkehrswende. Letter by the Board of Academic Advisors to the Federal Ministry for Economic Affairs and Energy (2019) Letter (German)
- Nationale Industriestrategie. Letter by the Board of Academic Advisors to the Federal Ministry for Economic Affairs and Energy (2019) Letter (German)
- Bildungsgerechtigkeit als Kernelement der Sozialen Marktwirtschaft. Letter by the Board of Academic Advisors to the Federal Ministry for Economic Affairs and Energy (2019) Letter (German)
- Regionalkomponenten bei der EE-Vergütung. Report for the Monopolies Commission for the preparation of the 77th special report Energie2017. V. Grimm, G. Zöttl, and C. Sölch (2017) Report (German), Special report Energie2017
- Dezentralität und Zellulare Optimierung – Auswirkungen auf den Netzausbaubedarf. Report for the N-Ergie AG, V. Grimm, G. Zöttl, M. Ambrosius, B. Rückel, C. Sölch, and Prognos AG (2016) Report (German): Short version, Long version
- Regionale Preiskomponenten im Strommarkt. Report for the Monopolies Commission for the preparation of the 71st special report Energie2015. V. Grimm, G. Zöttl, B. Rückel, and C. Sölch (2015) Report (German), Special report Energie2015
- Increasing Investment in Germany. Report prepared by the expert commission on behalf of the Federal Minister for Economic Affairs and Energy, Berlin. Commission: Fratzscher, M. (Chair) , S. Articus, F. Bsirske, R. Feiger, L. P. Feld, J. Fitschen, V. Grimm, R. Hoffmann, H. Jung, M. Kerber, W. Lemb, F.-J. Lersch-Mense, H.-H. Loewenstein , T. Mayer, T. Oletzky, S. Russwurm, M. Schnitzer, U. Schröder, H. Schwager, E. Schweitzer, M. Vassiliadis, T. R. Böger, F. Nauschnigg, T. Posselt, A. Bender, W. Eckart, S. Eide, D. Homann, A. Lieber, L. Schuknecht, B. Alm, R. L ́Hoest, M. Meurers, U. Neuhäußer, P. Steinberg, S. Weins, J. Zettelmeyer, M. Gornig, C. Michelsen, B. Pagel, and A. Schiersch (2015) Report
- Report to the Ministry of Economics of Schleswig Holstein on the planned Tenders for Photovoltaik Capacity in Germany (2014)
- Tendering for outpatient generic medicines in Europe V. Grimm and ESMT Competition Analysis GmbH, Berlin (2010)
- Electricity Market Design – The Pricing Mechanism of the Day Ahead Electricity Spot Market Auction on the EEX , Cologne. A. Ockenfels, V. Grimm, and G. Zöttl (2008) Report
- BWA (“WiMax”) auction 2006 (consulting of a potential bidder), V. Grimm and A. Ockenfels (2006)
- UMTS auction 2000 (bid preparation for Vodafone), V. Grimm, F. Riedel, and E. Wolfstetter (2000)
- GSM auction 1999 (bid preparation for Mannesmann Mobilfunk), V. Grimm, F. Riedel, and E. Wolfstetter (1999)