The flow-based market coupling domain - Why we can't get it right

Björn Felten, Paul Osinski, Tim Felling and Christoph Weber

Utilities Policy, 2021, vol. 70, issue C

Abstract: Significant welfare gains can be achieved by interlinking electric power systems. A major improvement in this regard has been the implementation of flow-based market coupling (FBMC) in Central Western Europe [Réseau de transportd'électricité (RTE) et al., 2015]. However, recent assessments [Entso-E, 2018] have shown that FBMC is not yet fully understood. We contrast the FBMC domain with the feasible regions in a nodal market design based on a stylized example. Our analysis reveals the essential elements of FBMC, including its positive features. We also show that certain FBMC approximations will always affect welfare to a certain extent.

Keywords: Flow-based market coupling; Zonal pricing; Welfare (search for similar items in EconPapers)
JEL-codes: C61 C80 D61 Q41 Q43 Q48 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:juipol:v:70:y:2021:i:c:s0957178720301302

DOI: 10.1016/j.jup.2020.101136

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