Measuring the impact of market coupling on the Italian electricity market

Elisabetta Pellini

Energy Policy, 2012, vol. 48, issue C, 322-333

Abstract: This paper evaluates the impact on the Italian electricity market of replacing the current explicit auction mechanism with market coupling. Maximising the use of the cross-border interconnection capacity, market coupling increases the level of market integration and facilitates the access to low-cost generation by consumers located in high-cost generation countries. Thus, it is expected that a high-priced area such as Italy could greatly benefit from the introduction of this mechanism. In this paper, the welfare benefits are estimated for 2012 under alternative market scenarios, employing the optimal dispatch model ELFO++. The results of the simulations suggest that the improvement in social surplus is likely to be significant, especially when market fundamentals are tight.

Keywords: Market coupling; Market integration; Italian day-ahead electricity market (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (25)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:48:y:2012:i:c:p:322-333

DOI: 10.1016/j.enpol.2012.05.029

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