Leonardo Meeus, The Evolution of Electricity Markets in Europe

DOI10.3366/gels.2022.0071
Author
Pages116-120
Date01 February 2022
Published date01 February 2022

How does the European electricity market work? What is the sequence of electricity markets in Europe? How do the cross-border trade and transmission links aim for electricity market integration? What rules are needed to ensure the security of supply and the benefits of the electricity trade? How does the adoption of a sociotechnical systems approach connect to just transition? These are some of the central questions in this book, The Evolution of Electricity Markets in Europe. In this volume, Meeus and his associates provide an overview of key concepts and approaches to studying European electricity markets. They define the electricity markets as wholesale markets to price the electric energy commodity, markets to put prices on transmission capacity, markets for reserves or balancing services, and markets to correct the outcomes of the wholesale and balancing markets. In eight chapters grouped into three parts, they divided an infinitely complex topic into easily digestible components. Part I examines cross-border trade and international transmission links. Part II discusses the security of supply through the energy governance prism of regulation, operation system, and finance. Finally, part III presents key energy and sociotechnical issues in society.

Chapter one discussed the political process, the technical drivers, and the benefits of integrating electricity markets in Europe. The author annexed a table of the first generation of EU network codes and guidelines to this chapter. Chapter two reviewed the historical evolution of the transmission rights to trade across borders and the market-based allocation of rights. The chapter, however, highlighted that interventions by national TSO's in times of stress still need to be agreed upon and harmonized at the regional market level by traders.

The third chapter focused on calculating cross-border trade constraints and congestion management in the day-ahead and intraday timeframes. It reveals how the Capacity allocation and congestion management (CACM) regulation balances the rules of market coupling in between TSOs, Nominated Electricity Market Operator (NEMOs), regulatory authorities, and ​European Union Agency for the Cooperation of Energy Regulators (ACER). The concerning point is that ‘the current bidding zone configuration is outdated’ and some TSOs prefer to keep their national zone to ensure operational security.

Chapter four is about network charges, costs, and market power in an international trade...

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