Off-shore Bidding Zones under Flow-Based Market Coupling

Conference paper (2023)

Authors

Michiel Kenis Katholieke Universiteit Leuven
Erik Delarue Katholieke Universiteit Leuven
K. Bruninx Energy and Industry
Fernando Dominguez Energy Technology
Research Group
Energy and Industry
Copyright: © 2023 Michiel Kenis, Erik Delarue, K. Bruninx, Fernando Dominguez
DOI
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https://doi.org/10.1109/PowerTech55446.2023.10202755
Advanced Hybrid Coupling Bidding zone configuration Flow-Based Market Coupling Off-shore wind power Standard Hybrid Coupling
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Published Date

2023

Language

English

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Research Group

Energy and Industry

Abstract

The market integration of hybrid off-shore projects, consisting of wind farms and transmission assets connecting different market zones, requires re-examining bidding zone definitions. Policy makers consider separate off-shore bidding zones to optimally integrate off-shore wind farms in power systems. In this paper, we apply Advanced Hybrid Coupling to include off-shore DC transmission lines in flow-based market coupling, and compare different bidding zone configurations. We find that off-shore bidding zones lead to a transfer of welfare: the producers' surplus of off-shore wind farm owners decreases as a result of a lower average price and the congestion rent for TSOs increases. Despite that an off-shore bidding zone signals transmission scarcity better, it impacts the need for support instruments for off-shore wind farms.