ECN publication
ELMA: model of a liberalized electricity market
Published by: Publication date:
ECN Policy Studies 1998
ECN report number: Document type:
ECN-I--97-028 ECN publication
Number of pages: Full text:
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In the current electricity market in the European Union an ongoing trendof liberalization takes place. At the business unit Policy Studies of the Netherlands Energy Research Foundation the project 'Liberalization and Deregulation in Electricity Markets' is started, with the purpose of conducting a research into the motives and the impact of the liberalization of the electricity market in Western Europe. The ELMA-model was developed to quantitatively analyze the effects of this trend of liberalization. The model constitutes an open market framework where several regulation measures, e.g. price regulation, emission bounds and regulation of investments can be analyzed. ELMA is an integrated model that consists of three submodels, that together constitute the market. The model has periodical optimizations, where in each five-year period the three submodels are optimized successively. In the first submodel base load and peak load electricity is traded in an international market by means of five-year contracts. In the second submodel, electricity production costs are minimized by all producers individually. In the final submodel, all producers are enabled to make investments. These investments are based on expected developments in electricity demand and fuel prices. The time horizon of the model is 2025. The model is implemented for Belgium, France, Germany and the Netherlands. For each of these countries different institutional systems can be analyzed. This can be done by varying the number of electricity producers and adjusting the extent of regulation. Other countries can easily be added to the model. The mathematical modeling language AIMMS was used to implement the model. This report contains a comprehensive mathematical description of the model and its features. It is also a user's guide for ECN-employees who will work with the ELMA-model. 21 refs.

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