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Cross-border Effects of Capacity Remuneration Mechanisms: The Swiss Case

Zimmermann, Florian; Bublitz, Andreas; Keles, Dogan; Fichtner, Wolf

Abstract (englisch):
In this article, cross-border effects of different market design options are analyzed using Switzerland, which is strongly interconnected to larger neighboring markets, as a case study. An investigation is conducted with an agent-based model where in one scenario, all market designs are represented according to the current legislation, and in another, energy-only markets (EOM) are assumed in all considered countries. The results show that wholesale electricity prices are highly dependent on the chosen market design and in the annual average are up to 27% higher in the EOM scenario. Due to expected larger interconnector capacities, this increase is evident in all simulated markets. Furthermore, the results indicate that the planned market design changes in the neighboring countries decrease investments in Switzerland. However, generation adequacy is still guaranteed due to the high Swiss hydropower storage capacity. Our results suggest that, under the current circumstances, a domestic mechanism in Switzerland is not required.

DOI: 10.5547/01956574.42.2.fzim
Zugehörige Institution(en) am KIT Institut für Industriebetriebslehre und Industrielle Produktion (IIP)
Publikationstyp Zeitschriftenaufsatz
Publikationsmonat/-jahr 04.2021
Sprache Englisch
Identifikator ISSN: 0195-6574
KITopen-ID: 1000118623
HGF-Programm 37.12.03 (POF IV, LK 01) Smart Areas and Research Platforms
Erschienen in The energy journal
Verlag International Association for Energy Economics
Band 42
Heft 2
Seiten 1-2
Schlagwörter Capacity remuneration mechanisms, Cross-border effects, Electricity market coupling, Generation adequacy, Switzerland, Agent-based modeling
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