Refining PLEF Short-Term Markets

The study identifies elements that are critical for providing flexibility in the design of the electricity market for the CWE region

  • Project Duration: 05/2015 - 07/2016

In light of the increasing share of electricity from wind and PV in the region covered by the Pentalateral Energy Forum (Belgium, Germany, France, Luxembourg, Netherlands, Austria and Switzerland), much higher power system flexibility is required.

The study first explains how electricity price formation is driven by the specific design features of the markets in these countries. As the incentives for providing flexibility are closely tied to market prices, understanding the factors that influence price formation is crucial. The study uses empirical as well as deductive analysis methods to determine how specific market design features promote or impair the provisioning of flexibility. Based on this analysis, it discusses the market design changes that should be implemented in the region in order to promote flexibility.

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