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Impact assessment of a minimum threshold on cross-zonal capacity in a flow-based market

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The current organization of the internal electricity market in Europe relies on a zonal market system: the European power system is divided in bidding zones, electricity trades within a bidding zone can occur in an unconstrained manner, while electricity trades between bidding zones are limited by cross-zonal capacities. Two approaches can be used to calculate and allocate cross-zonal capacity: the coordinated Net Transmission Capacity (NTC) approach or the flow-based approach. In Central Western Europe, the flow-based approach is implemented for the day-ahead market since 2015. To avoid undue discrimination between internal and cross-border power exchanges, a minimum threshold of 70% on the cross-zonal capacity available for trade will be enforced in a near future. Such a threshold could significantly impact the socio-economic welfare and its distribution between the various actors. However, no assessment of the impacts of such a threshold has been performed so far, in particular because no convincing approach exists to perform such an assessment (e.g. N-1 security constraints and redispatch neglected). This paper develops such an approach and demonstrates its applicability on a case study, in order to assess the impact of a minimum threshold on cross-zonal capacity in a flow-based market.

Author(s):

Pierre Henneaux    
Université libre de Bruxelles
Belgium

Panagiotis Lamprinakos    
Université libre de Bruxelles
Belgium

Gauthier de Maere d'Aertrycke    
Tractebel
Belgium

Karim Karoui    
Tractebel
Belgium

 

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