Within the wholesale markets – also referred to as bidding zones – power can be traded free of potential network bottlenecks. Bottlenecks occur between the biding zones, which influence the current trade and lead to different wholesale prices.
The delineation of the bidding zones has a significant impact on electricity prices and hence on the distribution of social welfare gains in Europe. The delineation determines the attractiveness of the locations of renewable energy plants and ultimately affects the necessary financial support. It can promote or inhibit the successful continuation of the energy transition in Germany and Europe.
The regulation (EU) 2015/1222 of the European Commission stipulates the guidelines for the allocation of capacity and congestion management. Besides a variety of arrangements for the management of cross-border capacities, this regulation defines the rules for the delineation of bidding zones.
In order to contribute to the process of delineation of the bidding zones and in particular to influence its impact on the energy transition process forward, the Federal Ministry of Economics and Energy (BMWi) has asked E-Bridge and other project partners to elaborate a broad scientific study.
Due to the complexity and the range of topics of the project a clear methodology had to be developed. In this, the interfaces of individual tasks had to be defined or concretized. The different bidding zone configurations were examined for relevant energy economic scenarios based on market and network simulations. The market simulations served as basis of economic data such as prices, liquidity, etc. and the network simulation as basis for the assessment compliance with network security including the frequency, extent and cost of counter trading served to determine the economic parameters.
The decisive strength of the approach was that both the build-up of power plants (as part of the energy scenarios) as well as the bidding zone configurations themselves could also be determined endogenously.
The discussion about ensuring sufficient security of supply in the electrical energy industry is becoming increasingly important.
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