Nodal vs. zonal pricing

Commissioned by BMWi

Lion Hirth

With Consentec, Ecofys, Connect, Frontier Economics, Öko-Institut and Prognos

2018

Zonal and nodal pricing represent the grid’s limited transmission capacity in the wholesale market in fundamentally different ways: one price per bidding zone versus an individual price at every grid node. Against the backdrop of rapidly rising redispatch volumes, we compared the two systems for Germany’s economics ministry, together with Consentec, against a catalog of assessment criteria – treating both as conceptual price regimes and mapping out the state of the science, including diverging expert views. The project included a series of three workshops at the ministry with 20–30 international experts each. This report was originally published in German.