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  4. Electricity Market Coupling in Europe: Status Quo and Future Challenges
 
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Electricity Market Coupling in Europe: Status Quo and Future Challenges

Type
book section
Date Issued
2020-03
Author(s)
Mahringer, Steffen
Füss, Roland  
Prokopczuk, Marcel
Editor(s)
Goutte, Stéphane
Nguyen, Duc Khuong
DOI
https://doi.org/10.1142/9789813278387_0005
Abstract
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.
Language
English
Keywords
Energy Market Coupling
Electricity Market Reforms
Explicit and Implicit Auction
Price Convergence
HSG Classification
contribution to scientific community
HSG Profile Area
SOF - System-wide Risk in the Financial System
Refereed
No
Book title
Handbook of Energy Finance
Publisher
World Scientific
Start page
93
End page
120
Pages
28
Official URL
https://www.worldscientific.com/doi/10.1142/9789813278387_0005
URL
https://www.alexandria.unisg.ch/handle/20.500.14171/112368
Subject(s)

economics

business studies

finance

Division(s)

s/bf - Swiss Institut...

SEW - Swiss Institute...

Contact Email Address
roland.fuess@unisg.ch
Eprints ID
242508
File(s)
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open.access

Name

15_12_Fuess et al_Electricity Market Coupling and the Pricing of Transmission Rights-An Option-based Approach.pdf

Size

1.35 MB

Format

Adobe PDF

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e6636bae4b097030db5b21c4cabdbf2e

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