E-SAVE: European Electricity Market Coupling and its Impact on Security of Supply with increasing Shares from Renewable Energies

The energy and climate change policy targets for a stronger use of renewable energies in Europe lead to new challenges for electricity markets. At the same time, the establishment of an internal European electricity market is being pursued in order to make the energy system more efficient. Corresponding measures include, among others, a better and more efficient coupling of national electricity markets (e.g. via the so-called “market coupling”).

In liberalized electricity markets, security of supply depends on investment decisions made by electricity market participants, in particular power plant operators. Energy policy can provide an appropriate framework for the actors through an adequate design of markets. Accordingly, the anticipated decisions of market participants regarding the electricity market design must be taken into account. In the context of the expansion of renewable energies, the coupling of electricity markets in Europe as well as their interaction in electricity pricing and the resulting long-term investments in power plant capacities has hardly been questioned so far. Moreover, different market configurations in the national electricity markets may cause undesirable interactions.

The overriding aim of this research project is thus the investigation of the long-term security of supply, taking into account the coupling of electricity markets and the expansion of the renewable energies. Here, also the current configuration of the national electricity markets will be considered. For long-term analysis of current systems with their techno-economic properties, the energy system analysis is basically suitable. In particular, the agent-based simulation has proven itself in this regard in order to examine market situations with several, heterogeneous actors. In this research project, an agent-based electricity market simulation model, which is focussed on Germany, is being further developed into a European model, which also reflects correlated feed-in from renewable energies.