IDEAS home Printed from https://ideas.repec.org/a/spr/sumafo/v29y2021i2d10.1007_s00550-021-00520-w.html
   My bibliography  Save this article

Impact of Flow Based Market Coupling on the European Electricity Markets

Author

Listed:
  • Rafael Finck

    (Karlsruhe Institute of Technology (KIT))

Abstract

Flow Based Market Coupling is the target model for determining exchange capacities in the internal European Electricity Market. It has been in operation in Central Western Europe since 2015 and is scheduled to be extended to the wider Core region in the near future. Exchange capacities have a significant impact on market prices, exchanges and the energy mix, thus also determining the CO $${}_{2}$$ 2 footprint of electricity generation in the system. Stakeholders therefore need to develop an understanding for the impact of Flow Based Market Coupling and the parameter choice, like the minimum exchange capacities introduced in 2020, on the market outcome. This article presents a framework to model Flow Based Market Coupling and analyse the impact of different levels of regulatory induced minimum trading capacities as well as the effect of the extension towards the Core region. Electricity prices, exchange positions and the number and nature of binding constraints in the market results under different market coupling scenarios are investigated. The results show that increased level of minimum trading capacities in CWE market coupling decrease the German net export position by up to 7 TW h or 23%, while French exports increase by up to 10 TW h or 9%. The different transfer capacity in the scenarios induce a price difference of up to 13%. Increased exchange capacities allow for more base load generation with the corresponding effects for the CO $${}_{2}$$ 2 emissions of the system. The nature of coupling constraints is highly dynamic and dependent on the system state, which makes the suitability of static NTC values in energy system scenarios questionable.

Suggested Citation

  • Rafael Finck, 2021. "Impact of Flow Based Market Coupling on the European Electricity Markets," Sustainability Nexus Forum, Springer, vol. 29(2), pages 173-186, June.
    • Handle: RePEc:spr:sumafo:v:29:y:2021:i:2:d:10.1007_s00550-021-00520-w
    DOI: 10.1007/s00550-021-00520-w
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00550-021-00520-w
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00550-021-00520-w?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Felten, Björn & Osinski, Paul & Felling, Tim & Weber, Christoph, 2021. "The flow-based market coupling domain - Why we can't get it right," Utilities Policy, Elsevier, vol. 70(C).
    2. Schönheit, David & Weinhold, Richard & Dierstein, Constantin, 2020. "The impact of different strategies for generation shift keys (GSKs) on the flow-based market coupling domain: A model-based analysis of Central Western Europe," Applied Energy, Elsevier, vol. 258(C).
    3. Hagspiel, S. & Jägemann, C. & Lindenberger, D. & Brown, T. & Cherevatskiy, S. & Tröster, E., 2014. "Cost-optimal power system extension under flow-based market coupling," Energy, Elsevier, vol. 66(C), pages 654-666.
    4. Poplavskaya, Ksenia & Totschnig, Gerhard & Leimgruber, Fabian & Doorman, Gerard & Etienne, Gilles & de Vries, Laurens, 2020. "Integration of day-ahead market and redispatch to increase cross-border exchanges in the European electricity market," Applied Energy, Elsevier, vol. 278(C).
    5. Bjørndal, Endre & Mette, Bjørndal & Cai, Hong, 2018. "Flow-Based Market Coupling in the European Electricity Market – A Comparison of Efficiency and Feasibility," Discussion Papers 2018/14, Norwegian School of Economics, Department of Business and Management Science.
    6. Lang, Lukas Maximilian & Dallinger, Bettina & Lettner, Georg, 2020. "The meaning of flow-based market coupling on redispatch measures in Austria," Energy Policy, Elsevier, vol. 136(C).
    7. Schönheit, David & Dierstein, Constantin & Möst, Dominik, 2021. "Do minimum trading capacities for the cross-zonal exchange of electricity lead to welfare losses?," Energy Policy, Elsevier, vol. 149(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mario Schmidt, 2021. "Klimaschutz, Ressourcenschonung und Circular Economy als Einheit denken [Thinking of climate protection, resources conservation and the circular economy as a unit]," Sustainability Nexus Forum, Springer, vol. 29(2), pages 57-64, June.
    2. Shi, Jiantao & Guo, Ye & Wu, Wenchuan & Sun, Hongbin, 2024. "Scenario-oriented multi-area joint market clearing of energy and reserve under uncertainty," Applied Energy, Elsevier, vol. 361(C).
    3. Bakhshideh Zad, Bashir & Toubeau, Jean-François & Bruninx, Kenneth & Vatandoust, Behzad & De Grève, Zacharie & Vallée, François, 2022. "Supervised learning-assisted modeling of flow-based domains in European resource adequacy assessments," Applied Energy, Elsevier, vol. 325(C).
    4. Lüth, Alexandra & Seifert, Paul E. & Egging-Bratseth, Ruud & Weibezahn, Jens, 2023. "How to connect energy islands: Trade-offs between hydrogen and electricity infrastructure," Applied Energy, Elsevier, vol. 341(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bucksteeg, Michael & Voswinkel, Simon & Blumberg, Gerald, 2024. "Improving flow-based market coupling by integrating redispatch potential―Evidence from a large-scale model," Energy Policy, Elsevier, vol. 188(C).
    2. Schönheit, David & Dierstein, Constantin & Möst, Dominik, 2021. "Do minimum trading capacities for the cross-zonal exchange of electricity lead to welfare losses?," Energy Policy, Elsevier, vol. 149(C).
    3. Felten, Björn & Osinski, Paul & Felling, Tim & Weber, Christoph, 2021. "The flow-based market coupling domain - Why we can't get it right," Utilities Policy, Elsevier, vol. 70(C).
    4. Schönheit, David & Bruninx, Kenneth & Kenis, Michiel & Möst, Dominik, 2022. "Improved selection of critical network elements for flow-based market coupling based on congestion patterns," Applied Energy, Elsevier, vol. 306(PA).
    5. Bakhshideh Zad, Bashir & Toubeau, Jean-François & Bruninx, Kenneth & Vatandoust, Behzad & De Grève, Zacharie & Vallée, François, 2022. "Supervised learning-assisted modeling of flow-based domains in European resource adequacy assessments," Applied Energy, Elsevier, vol. 325(C).
    6. Bucksteeg, Michael & Voswinkel, Simon & Blumberg, Gerald, 2023. "Improving flow-based market coupling by integrating redispatch potential - Evidence from a large-scale model," EconStor Preprints 270878, ZBW - Leibniz Information Centre for Economics.
    7. Tim Felling & Björn Felten & Paul Osinski & Christoph Weber, 2023. "Assessing Improved Price Zones in Europe: Flow-Based Market Coupling in Central Western Europe in Focus," The Energy Journal, , vol. 44(6), pages 71-112, November.
    8. Göransson, Lisa & Goop, Joel & Unger, Thomas & Odenberger, Mikael & Johnsson, Filip, 2014. "Linkages between demand-side management and congestion in the European electricity transmission system," Energy, Elsevier, vol. 69(C), pages 860-872.
    9. Peter, Jakob & Wagner, Johannes, 2018. "Optimal Allocation of Variable Renewable Energy Considering Contributions to Security of Supply," EWI Working Papers 2018-2, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    10. Xu, Fangyuan & Zhu, Weidong & Wang, Yi Fei & Lai, Chun Sing & Yuan, Haoliang & Zhao, Yujia & Guo, Siming & Fu, Zhengxin, 2022. "A new deregulated demand response scheme for load over-shifting city in regulated power market," Applied Energy, Elsevier, vol. 311(C).
    11. Sinn, Hans-Werner, 2017. "Buffering volatility: A study on the limits of Germany's energy revolution," European Economic Review, Elsevier, vol. 99(C), pages 130-150.
    12. Rebeca Ramirez Acosta & Chathura Wanigasekara & Emilie Frost & Tobias Brandt & Sebastian Lehnhoff & Christof Büskens, 2023. "Integration of Intelligent Neighbourhood Grids to the German Distribution Grid: A Perspective," Energies, MDPI, vol. 16(11), pages 1-16, May.
    13. Bertsch, Joachim & Brown, Tom & Hagspiel, Simeon & Just, Lisa, 2016. "The relevance of grid expansion under zonal markets," EWI Working Papers 2015-7, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    14. Reichenberg, Lina & Hedenus, Fredrik & Odenberger, Mikael & Johnsson, Filip, 2018. "The marginal system LCOE of variable renewables – Evaluating high penetration levels of wind and solar in Europe," Energy, Elsevier, vol. 152(C), pages 914-924.
    15. Tafarte, Philip & Lehmann, Paul, 2023. "Quantifying trade-offs for the spatial allocation of onshore wind generation capacity – A case study for Germany," Ecological Economics, Elsevier, vol. 209(C).
    16. Tafarte, Philip & Lehmann, Paul, 2021. "Quantifying trade-offs for the spatial allocation of onshore wind generation capacity: A case study for Germany," UFZ Discussion Papers 2/2021, Helmholtz Centre for Environmental Research (UFZ), Division of Social Sciences (ÖKUS).
    17. Dzikri Firmansyah Hakam, 2018. "Nodal Pricing: The Theory and Evidence of Indonesia Power System," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 135-147.
    18. Schmid, Eva & Knopf, Brigitte, 2015. "Quantifying the long-term economic benefits of European electricity system integration," Energy Policy, Elsevier, vol. 87(C), pages 260-269.
    19. Osińska, Magdalena & Kyzym, Mykola & Khaustova, Victoriia & Ilyash, Olha & Salashenko, Tetiana, 2022. "Does the Ukrainian electricity market correspond to the european model?," Utilities Policy, Elsevier, vol. 79(C).
    20. Wang, Ni & Verzijlbergh, Remco A. & Heijnen, Petra W. & Herder, Paulien M., 2023. "Incorporating indirect costs into energy system optimization models: Application to the Dutch national program Regional Energy Strategies," Energy, Elsevier, vol. 276(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:sumafo:v:29:y:2021:i:2:d:10.1007_s00550-021-00520-w. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.