Details
| Original language | English |
|---|---|
| Title of host publication | Handbook of energy finance |
| Subtitle of host publication | Theories, practices and simulations |
| Place of Publication | New Jersey |
| Publisher | World Scientific |
| Chapter | 5 |
| Pages | 93-120 |
| Number of pages | 28 |
| ISBN (electronic) | 9789813278387 |
| ISBN (print) | 9789813278370 |
| Publication status | Published - 2020 |
Abstract
Keywords
- Electricity market reforms, Energy market coupling, Explicit and implicit auction, Price convergence
ASJC Scopus subject areas
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Handbook of energy finance: Theories, practices and simulations. New Jersey: World Scientific, 2020. p. 93-120.
Research output: Chapter in book/report/conference proceeding › Contribution to book/anthology › Research
}
TY - CHAP
T1 - Electricity market coupling in europe
T2 - Status quo and future challenges
AU - Füss, Roland
AU - Mahringer, Steffen
AU - Prokopczuk, Marcel
PY - 2020
Y1 - 2020
N2 - In electricity markets globally, market participants and policymakers increasingly focus on integrating adjacent, yet separate market areas via cross-border trade in electricity. Based on a discussion of the institutional framework for organizing cross-border trade, this chapter analyzes how spot and futures prices for wholesale electricity are affected by different degrees of market integration. We first contrast the two main mechanisms to allocate transmission capacity between neighboring markets: explicit and implicit auctions. Subsequently, we study the impact of these allocation schemes on the empirical price dynamics of major electricity markets in Europe. Our empirical analysis thereby confirms that under market coupling, economically inefficient cross-border flows in the wrong direction can be avoided. From a policy point of view, however, we show that further market integration can be hindered by individual energy market regulation on a national level, which may be opposed to supra-national frameworks such as market coupling.
AB - In electricity markets globally, market participants and policymakers increasingly focus on integrating adjacent, yet separate market areas via cross-border trade in electricity. Based on a discussion of the institutional framework for organizing cross-border trade, this chapter analyzes how spot and futures prices for wholesale electricity are affected by different degrees of market integration. We first contrast the two main mechanisms to allocate transmission capacity between neighboring markets: explicit and implicit auctions. Subsequently, we study the impact of these allocation schemes on the empirical price dynamics of major electricity markets in Europe. Our empirical analysis thereby confirms that under market coupling, economically inefficient cross-border flows in the wrong direction can be avoided. From a policy point of view, however, we show that further market integration can be hindered by individual energy market regulation on a national level, which may be opposed to supra-national frameworks such as market coupling.
KW - Electricity market reforms
KW - Energy market coupling
KW - Explicit and implicit auction
KW - Price convergence
UR - http://www.scopus.com/inward/record.url?scp=85096268876&partnerID=8YFLogxK
U2 - 10.1142/9789813278387_0005
DO - 10.1142/9789813278387_0005
M3 - Contribution to book/anthology
SN - 9789813278370
SP - 93
EP - 120
BT - Handbook of energy finance
PB - World Scientific
CY - New Jersey
ER -