Uncertainty-Aware Capacity Allocation in Flow-Based Market Coupling


Abstract in English

The effective allocation of cross-border trading capacities is one of the central challenges in implementation of a pan-European internal energy market. Flow-based market coupling has shown promising results for to achieve better price convergence between market areas, while, at the same time, improving congestion management effectiveness by explicitly internalizing power flows on critical network elements in the capacity allocation routine. However, the question of FBMC effectiveness for a future power system with a very high share of intermittent renewable generation is often overlooked in the current literature. This paper provides a comprehensive summary on FBMC modeling assumptions, discusses implications of external policy considerations and explicitly discusses the impact of high-shares of intermittent generation on the effectiveness of FBMC as a method of capacity allocation and congestion management in zonal electricity markets. We propose to use an RES uncertainty model and probabilistic security margins on the FBMC parameterization to effectively assess the impact of forecast errors in renewable dominant power systems. Numerical experiments on the well-studied IEEE 118 bus test system demonstrate the mechanics of the studied FBMC simulation. Our data and implementation are published through the open-source power market tool POMATO.

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