Date: 2020
Type: Other
The importance of a sound bidding-zone review for the efficient functioning of the internal electricity market
Policy Briefs, 2020/22, Florence School of Regulation, Energy, [Electricity]
POTOTSCHNIG, Alberto, The importance of a sound bidding-zone review for the efficient functioning of the internal electricity market, Policy Briefs, 2020/22, Florence School of Regulation, Energy, [Electricity] - https://hdl.handle.net/1814/67051
Retrieved from Cadmus, EUI Research Repository
An inadequate bidding zone configuration for the EU electricity market risks jeopardising the benefits of market integration for energy consumers, by increasing the need for costly remedial actions. According to the CACM Regulation, liquidity is one of the criteria for assessing different possible configurations in a bidding-zone review. The available evidence from Europe and the US does not seem to support the claim, often made, that larger bidding zones promote liquidity. While liquidity is important for the well-functioning of markets, it cannot promote competition if not supported by the capability of the physical network to transport flows within a bidding- zone. Therefore, what seems to be more relevant is the structure (concentration) of the sector with respect to the structure (congestions) of the network.
Cadmus permanent link: https://hdl.handle.net/1814/67051
Full-text via DOI: 10.2870/77189
ISBN: 9789290848905
ISSN: 2467-4540
Series/Number: Policy Briefs; 2020/22; Florence School of Regulation; Energy; [Electricity]
Publisher: European University Institute