Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/201589 
Year of Publication: 
2019
Series/Report no.: 
HEMF Working Paper No. 06/2019
Publisher: 
University of Duisburg-Essen, House of Energy Markets & Finance, Essen
Abstract: 
By interlinking power systems, significant welfare gains can be achieved. However, different approaches for coupling electricity markets exist. A recent development in this field is the implementation of flow-based market coupling (FBMC) in Central Western Europe (CWE). Indeed, FBMC has proven to be advantageous compared to the former situation in CWE Amprion et al. 2014 and to be operationally manageable under current market conditions. However, analyses of possible future adjustments of market areas ("bidding zones") have shown problems in assessing and even understanding FBMC Entso-E 2018. Therefore, Part I of this two-part paper contributes to resolving these problems. First, it presents key issues and effects of all essential FBMC elements. This is done drawing the feasible regions of the FBMC constraints - a method that is well-known from optimization theory. However, in the way it is applied to FBMC it is novel and offers significant insights. These insights are presented on the basis of a stylized yet fully transparent and reproducible example. Thereby, we improve the understanding of benefits and shortcomings of FBMC. Second, we introduce a large-scale model framework capable of assessing FBMC as implemented in CWE. This enables us to assess real-world power systems - also when undergoing structural changes. This lays the foundation for the case study presented in Part II.
Subjects: 
Flow-based market coupling
Zonal pricing
Nodal pricing
Feasible regions
Flow-based domains
Electricity market modeling
Grid modeling
JEL: 
C61
C80
D61
Q41
Q43
Q48
Document Type: 
Working Paper

Files in This Item:
File
Size
2.95 MB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.