Effect of Balancing Network Code on cross-border capacity auctions

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Supervisor:
Dr. Divényi Dániel Péter
Department of Electric Power Engineering

„All models are wrong, but some are useful”

George Box

The European Commission’s approval of the Third Energy Package (714/2009) serves as a basis for the implementation of market coupling and provides regulatory background for the preparation of the Network Codes with the objective of cross-border trading of electricity and gas. Market coupling contributes to increasing competitiveness, higher security of supply, as well as to a more effective promotion of consumers’ interests. Over recent years and decades the gradual coupling of day-ahead markets was a dominant process in the Central and Eastern European region. The progress has not finished with the market coupling of day-ahead markets: the 2195/2017 regulation of the European Commission prescribes the coupling of reserve markets and elaborates the necessary forms of cooperation.

As seen above, the purpose of my thesis, modelling the optimized allocation of cross-border capacities, is relevant for the whole European power system. In the first semester, I reviewed the legislation, as the modelling of future capacity allocation must be aligned with the regulation framework. The envisioned operation is illustrated by examples in order to make it easier to understand the relatively dry legal text.

The second part of my work was implementing and testing a concrete model. The combinations of capacity calculation (NTC, flow-based) and allocation (explicit, implicit) methods determine four co-optimized capacity allocation models. I implemented an NTC based implicit capacity allocation model. The operation of the model is demonstrated by examples, then in full knowledge of results I draw the conclusions and give recommendations on modifying the model.

The objectives set out in my thesis have been achieved, however, aspects arisen during the analysis of the results raise possibilities for further developments, e.g. the transposition of reserve demand of transmission system operators into constraints as well as a flow-based solution of capacity calculation.

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