Social Welfare Report 02-04 / 2014* * This report contains welfare indicators for the NWE area as of the NWE go-live in February. The report for January, containing CWE welfare indicators only, has been published separately.
February 2014 Additional Social welfare in the NWE area that could be gained with no network constraints in CWE: 11,3 M Social welfare = Producer surplus + Consumer surplus + Congestion rent Producer surplus 62,5 M Consumer surplus -31,1 M Congestion Rent -20,1 M NB: Producer surplus, Consumer surplus and Congestion Rent are calculated as such: Sum of daily ( Value with ATC= ) - (Historical value) The daily values being a Sum of hourly values. In single hours the producer/consumer gain can be positive or negative. The highlighted value presents the sum of all hours of the respective month. 2
February 2014 Evolution of social welfare in NWE area that could be gained with no network constraints in CWE 3
1-Feb 2-Feb 3-Feb 4-Feb 5-Feb 6-Feb 7-Feb 8-Feb 9-Feb 10-Feb 11-Feb 12-Feb 13-Feb 14-Feb 15-Feb 16-Feb 17-Feb 18-Feb 19-Feb 20-Feb 21-Feb 22-Feb 23-Feb 24-Feb 25-Feb 26-Feb 27-Feb 28-Feb February 2014 Split of social welfare gain in surplus and congestion rent in the NWE area 4 000 000 3 000 000 2 000 000 1 000 000 - -1 000 000-2 000 000-3 000 000 NWE surplus Change NWE CR change 4
March 2014 Additional Social welfare in the NWE area that could be gained with no network constraints in CWE: 13,4 M Social welfare = Producer surplus + Consumer surplus + Congestion rent Producer surplus 62,8 M Consumer surplus -25,1 M Congestion Rent -24,3 M NB: Producer surplus, Consumer surplus and Congestion Rent are calculated as such: Sum of daily ( Value with ATC= ) - (Historical value) The daily values being a Sum of hourly values. In single hours the producer/consumer gain can be positive or negative. The highlighted value presents the sum of all hours of the respective month. 5
March 2014 Evolution of social welfare in NWE area that could be gained with no network constraints in CWE 6
March 2014 Split of social welfare gain in surplus and congestion rent in the NWE area 7
April 2014 Additional Social welfare in the NWE area that could be gained with no network constraints in CWE: 12,1 M Social welfare = Producer surplus + Consumer surplus + Congestion rent Producer surplus 49,1 M Consumer surplus -14,2 M Congestion Rent -22,9 M NB: Producer surplus, Consumer surplus and Congestion Rent are calculated as such: Sum of daily ( Value with ATC= ) - (Historical value) The daily values being a Sum of hourly values. In single hours the producer/consumer gain can be positive or negative. The highlighted value presents the sum of all hours of the respective month. 8
1-Apr 2-Apr 3-Apr 4-Apr 5-Apr 6-Apr 7-Apr 8-Apr 9-Apr 10-Apr 11-Apr 12-Apr 13-Apr 14-Apr 15-Apr 16-Apr 17-Apr 18-Apr 19-Apr 20-Apr 21-Apr 22-Apr 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr 28-Apr 29-Apr 30-Apr April 2014 Evolution of social welfare in NWE area that could be gained with no network constraints in CWE 2 000 000 1 500 000 1 000 000 500 000-9
1-Apr 2-Apr 3-Apr 4-Apr 5-Apr 6-Apr 7-Apr 8-Apr 9-Apr 10-Apr 11-Apr 12-Apr 13-Apr 14-Apr 15-Apr 16-Apr 17-Apr 18-Apr 19-Apr 20-Apr 21-Apr 22-Apr 23-Apr 24-Apr 25-Apr 26-Apr 27-Apr 28-Apr 29-Apr 30-Apr April 2014 Split of social welfare gain in surplus and congestion rent in the NWE area 4 000 000 3 000 000 2 000 000 1 000 000 - -1 000 000-2 000 000-3 000 000 NWE surplus Change NWE CR change 10
Definitions / explanations 11
Additional Social welfare that could be gained with no network constraints (Definition/explanation) The figure shows the additional social welfare that could be gained in the NWE area with no network constraints inside CWE (borders D-NL, NL-B, B-F, D-F). This key figure is calculated by hourly simulating/ coupling the CWE-region with ATC= at the borders D-NL, NL-B, B-F, D-F and comparing to real MC-results: Producer surplus= Producer surplus (ATC= )- Producer surplus(real ATC) Consumer surplus=consumer surplus (ATC= )- Consumer surplus(real ATC) Congestion rent= Congestion rent (ATC= )- congestion rent(real ATC) 12
Additional Social welfare that could be gained with no network constraints (Definition/explanation) The purpose of the welfare reporting is the demonstration of the benefits of CWE ATC Market Coupling and future CWE FB MC. The monthly publishing of this figure was commonly agreed between the CWE Regulators and the CWE Project. It is one part of the welfare reporting. 13
Examples: In single hours the producer/consumer gain can be positive or negative 14
Decrease in consumer surplus example 1/2 Two isolated markets (zero capacity) 80 70 60 80 70 60 50 40 30 consumer surplus (1) 50 40 30 producer surplus (2) 20 20 10 10 0 0 500 1000 1500 2000 0 0 500 1000 1500 2000 Demand Supply Demand Supply Area 1 MCV: 1000 MW, MCP: 10 Area 2 MCV: 500 MW, MCP: 50 Consumer surplus: 60K Producer surplus: 0 Consumer surplus: 0 Producer surplus: 10K Totals Consumer surplus: 60K Congestion revenue: 0 Producer surplus: 10K Social welfare: 70K 15
Decrease in consumer surplus example 2/2 Two coupled markets (infinite capacity) 80 70 60 50 40 30 20 10 consumer surplus (1) producer surplus (1) producer surplus (2) 0 0 500 1000 1500 2000 2500 3000 Demand Supply Area 1 MCV: 1400 MW, MCP: 50 Consumer surplus: 20K Producer surplus: 56K Area 2 MCV: 500 MW, MCP: 50 Consumer surplus: 0 Producer surplus: 10K Totals Consumer surplus: 20K (-40K) Congestion revenue: 0 Producer surplus: 66K (+56K) Social welfare: 86K (+16K) 16
Decrease in producer surplus example 1/2 Two isolated markets (zero capacity) 80 70 60 80 70 60 50 40 30 producer surplus (1) 50 40 30 consumer surplus (2) 20 20 10 10 0 0 500 1000 1500 2000 0 0 500 1000 1500 2000 Demand Supply Demand Supply Area 1 MCV: 1000 MW, MCP: 70 Area 2 MCV: 500 MW, MCP: 30 Consumer surplus: 0 Producer surplus: 60K Consumer surplus: 10K Producer surplus: 0 Totals Consumer surplus: 10K Congestion revenue: 0 Producer surplus: 60K Social welfare: 70K 17
Decrease in producer surplus example 2/2 Two coupled markets (infinite capacity) 80 70 60 50 40 30 20 10 consumer surplus (1) producer surplus (1) consumer surplus (2) 0 0 500 1000 1500 2000 2500 3000 Demand Supply Area 1 MCV: 1400 MW, MCP: 30 Consumer surplus: 56K Producer surplus: 20K Area 2 MCV: 500 MW, MCP: 30 Consumer surplus: 10K Producer surplus: 0 Totals Consumer surplus: 66K (+56K) Congestion revenue: 0 Producer surplus: 20K (-40K) Social welfare: 86K (+16K) 18