The approval of the Third Energy Package in 2009 marked the start of a further stage in power market integration in Europe.
Following the wake of the Third Energy Package, the objective of attaining an efficient pan-European electricity market has been given the highest priority to increase competitiveness, foster the penetration of RES generation and also enhance the security of supply - assuming that in a perfect competitive market generation companies would react offering their available power production in the areas showing generation shortfall and, consequently, higher energy prices. The EC set the year 2014 as the deadline to attain a full market integration in the EU. The main organizations in Europe are reacting posting at the top of their agendas this target. F.i. ENTSO-E, the European Network of the Transmission System Operators for Electricity, established in December 2009, coherently with the provisions set forth in the EU Directive 2009/72/EC and Regulation EC 714/2009, included in the priority research fields “new tools based on simulation techniques that will give rise to new market design options1”.
Forward-looking market simulations, capable of accurately modeling the EU power markets, are a key issue to assess in due course the future energy and power patterns highlighting bottlenecks causing price differentials and consequently helping TSO planners to prioritize their investments in the grid development. Furthermore, an accurate market simulator can provide the investors with the right signs where to invest with the maximum expected profitability.
To cope with the new above-mentioned challenge concerning a coordinated expansion planning approach at the ENTSO-E multi-regional focus, CESI has been developing on behalf of TERNA, the Italian TSO, a market simulator, PROMED_GRID, capable of modeling the functioning of a multiarea market, specifically the EU power market, examining in one run a whole year, hour by hour.