Each year, the European Union issues a report on the State of the Energy Union to assess its progress. It draws attention to regulations and economics of the transition to a low-carbon, secure, affordable and integrated energy market.
The ASSET studies below take a closer look at issues such as the management and allocation of cross-border transmission capacity and its associated costs, congestion management and liquidity considerations regarding the size of bidding zones.
An efficient internal electricity market is of paramount importance in Europe to ensure that all consumers can purchase electricity at an affordable price while maintaining the security of the energy supply.
This study refers to the Commission Regulation (EU) 2015/1222 guidelines, relying on the concept of bidding zones and a flow-based approach to allocating transmission capacity to support the European electricity market.
Through analyses of key parameters currently used for capacity calculation methodologies, our experts concluded:
Network congestion management costs represent a non-negligible part of the total system cost of the Core capacity calculation region. Currently, the congestion management cost is borne by the zone in which the congestion occurs. However, congestions may result from loop flows or cross-zonal exchanges. The cost should therefore be shared between those responsible. This study assesses the methodology for congestion cost allocation in two steps:
The organization of coupled intraday and day-ahead markets generates costs for the Transmission System Operators (TSO) and the Nominated Electricity Market Operators (NEMO). This study lies within the context of the Commission's efforts to support the implementation of market coupling in Europe in line with Commission Regulation (EU) 2015/1222 establishing a guideline on capacity allocation and congestion management (hereafter “CACM”).
Discover our main study findings:
The European electricity target model is based upon a zonal pricing approach, as opposed to a nodal pricing system. In a nodal approach, a price is defined at each node of the transmission system, whereas the zonal model aggregates those nodes into zones.
Although the discussion of zonal versus nodal pricing is not new, current zonal inefficiencies are expected to increase with the need to decarbonize the energy system. This ASSET study argues the following:
Consumers have become increasingly active in their energy affairs, demanding a more affordable, reliable, and clean energy supply. This has a policy backing as the European energy policy puts customers at the heart of its long-term energy strategy for a climate-neutral economy.
This study explores:
The ASSET project provides studies in support of EU policy-making, research, and innovation in the field of energy.
Let's support a clean and affordable energy transition for all.