Cross-border trading via market coupling in South East Europe region

Abstract

Energy market gradual integration across Europe led to increased interest on cross-border trading. Cross-border trade leads to additional stress on the interconnection lines, resulting in increasing network congestion, which in turn restricts electricity trading. Thus, calculating the available capacity for trade is of great importance for the market. Today, the Available Transfer Capacity (ATC) mechanism dominates, but this methodology sounds to be replaced by Flow-Based (FB) approach across Europe. This paper investigates the cross-border congestion management via market coupling in South East Europe (SEE) region. The case study consists of both the FB and ATC approach in a 4-countries scenario, namely, Greece, North Macedonia, Bulgaria and Serbia. The purpose of our tests is to perform, compare and evaluate the effectiveness of each method for the SEE region, while the main findings are maximization of the social welfare, better cross-border trading and price convergence via FB method.