As a boutique consultancy, Neon works on seven clearly defined topics.

Market value of renewables

The market value of wind and solar power – their $/MWh revenue from spot markets – tends to decline as deployment increases. We have quantified this “value drop” for different jurisdictions in a range of projects and explored possibilities to mitigate the value drop, including studies for Internationale Energieagentur and Energiforsk. Scientific publications include highly cited articles in Energy Economics and IET Renewable Power Generation ..

Electricity market design

The design of wholesale and retail power markets determines the incentives to produce and consume electricity. Good market design leads to efficient investments and operation, bad market design to wastefulness and – in the extreme – to blackouts. Neon has done a few projects on market design, especially for Germany’s Federal Ministry of Economic Affairs and Energy. Notable projects include „EU-Market design“ and procurment of ancillary services. Other consulting and research projects have focused on local incentives in energy systems and the interplay between market and grid.


Europe’s zonal electricity markets are blind for network constraints within bidding zones. TSOs use congestion management measures such as redispatch to avoid line overload. Neon has lead a large project on market based redispatch for the German government and has published an influential paper on Inc-Dec-Gaming. On the latter topic we have also published in Energiewirtschaftlichen Tagesfragen and Tagesspiegel Background.

(Whole) System costs

Renewable energy, especially wind and solar, have significant influence on electricity markets, grids and conventional energy generation. We quantify this effect in models and market analysis and interprete the results in a coherent scientific fashion based on the economic concept of „system costs“. Clients in this area of expertise include the British Department of Energy & Climate Change as well as Germany’s Federal Ministry of Economic Affairs and Energy. Furthermore Neon published well-cited articles on the topic, including a strict definition of system costs, a proposal to use System LCOE as an alternative to LCOE and a classification of (electricity) system costs within economic theory.

Balancing energy

TSOs provision balancing energy to quickly restore the supply-demand balance in power systems. Similar to redispatch markets, balancing energy markets are linked to the physical conditions in the grid and therefore highly relevant for system stability. They are also closely related to short-term intraday-markets and the remuneration structure for the actual use of balancing energy. Neon supports Germanys Federal Ministry for Economic Affairs and Energy in further developing the German balancing energy market and advises utility companies, traders and direct marketers of renewable energy. We published two highly regarded articles on this topic, one on the “German paradox in balancing -energy” and the second on interplay between intraday-markets and balancing energy.

Power market modeling

Future energy prices are not only the basis for investment and strategic decisions, they also influence policies and politics. Together with our clients we develop consistant szenarios and model mid- to long-term electricity prices using EMMA . Those forecasts show price niveaus as well as price structures in up to hourly resolution. We also help our clients in the use of the EMMA open-source model and train analysts in electriciy system modeling.

Open Source / Open Data

Big Data has reached the energy sector: policy making and investment decisions rely increasingly on large-scale statistical and numerical models. These models are data-intensive. We deliver such data to clients and support them building up a modern data infrastructure. Neon analyzed the ENTSO-E Transparency Platform for the European Commission and studied open data in electricity system modeling for the German Federal Ministry of Economic Affairs and Energy. Neon is involved in a leading role in the operation of the Open Power System Data -platform.

Training seminars

We regularly train analysts and decision makers, offering open workshops as well as in-house trainings. Our seminar on Power Markets & Systems (two days) targets energy analysts and decision makers in industry, policy making, and society that aim at deepening their analytical understanding of energy markets. The seminar on Electricity System Modeling (three days) offers a compressed introduction into the numerical modeling of power markets and systems in Excel and GAMS.