Technical Papers

Market integration in Europe

Nov . 01 . 2011
​The approval of the Third Energy Package in 2009 marked the start of a further stage in powermarket 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 thepenetration of RES generation and also enhance the security of supply - assuming that in a perfectcompetitive market generation companies would react offering their available power production in theareas showing generation shortfall and, consequently, higher energy prices. The EC set the year 2014as the deadline to attain a full market integration in the EU. The main organizations in Europe arereacting posting at the top of their agendas this target. F.i. ENTSO-E, the European Network of theTransmission System Operators for Electricity, established in December 2009, coherently with theprovisions set forth in the EU Directive 2009/72/EC and Regulation EC 714/2009, included in thepriority research fields “new tools based on simulation techniques that will give rise to new marketdesign options1”. Forward-looking market simulations, capable of accurately modeling the EU power markets, are akey issue to assess in due course the future energy and power patterns highlighting bottlenecks causingprice differentials and consequently helping TSO planners to prioritize their investments in the griddevelopment. Furthermore, an accurate market simulator can provide the investors with the right signswhere to invest with the maximum expected profitability. To cope with the new above-mentioned challenge concerning a coordinated expansion planningapproach at the ENTSO-E multi-regional focus, CESI has been developing on behalf of TERNA, theItalian TSO, a market simulator, PROMED_GRID, capable of modeling the functioning of a multiareamarket, specifically the EU power market, examining in one run a whole year, hour by hour. ​

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