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Title:
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Flow-based market coupling: Stepping stone towards nodal pricing?
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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6-7-2012
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ECN report number:
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Document type:
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ECN-L--12-033
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Presentation
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Number of pages:
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Full text:
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20
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Download PDF
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Presented at: BAEE-CIGRE policy workshop “Flow-based market coupling: calculation, allocation and economic consequences”, The Hague, Dutch competition authority, Netherlands, April 26, 2012.
Abstract:
For achieving one internal energy market for electricity by 2014, market coupling is deployed to integrate national markets into regional markets and ultimately one European electricity market. The extent to which markets can be coupled depends on the available transmission capacities between countries.
Since interconnections are congested from time to time, congestion management methods are deployed to divide the scarce available transmission capacities over market participants.
For further optimization of the use of available transmission capacities while maintaining current security of supply levels, flow-based market coupling (FBMC) will be implemented in the CWE region by 2013. Although this is an important step forward, important hurdles for efficient congestion management remain. Hence, flow based market coupling is compared to nodal pricing, which is often considered as the most optimal solution from theoretical perspective. In the context of decarbonised power systems it is concluded that advantages of nodal pricing are likely to exceed its disadvantages, warranting further development of FBMC in the direction of nodal pricing.
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