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Introducing advanced hybrid coupling: Non-discriminatory coalescence of flow-based and net transfer capacity calculation regions

David Schönheit, Ivan Marjanović

TL;DR

The paper tackles non-discriminatory, efficient market coupling across flow-based and non-flow-border regions by introducing Advanced Hybrid Coupling (AHC) that uses virtual bidding zones to map the impact of non-flow borders within the flow-based region. By explicitly modeling inter-regional exchanges, AHC removes ex-ante margin reservations and allows all cross-border trades to compete for scarce capacity, improving welfare, fairness, and transparency. A model-based evaluation on a test network shows welfare gains and reduced congestion management costs within flow-based regions, while outlining how AHC shifts costs to non-flow zones and increases computational complexity. The work argues for phased EU-wide implementation of AHC to enhance capacity calculation, allocation efficiency, and grid security in future market coupling.

Abstract

Flow-based market coupling is substantially altering the computation of cross-zonal capacities for the trade of electricity in the vast majority of European markets. The main benefit of the flow-based method is improved accuracy by better representing the impact of cross-zonal trade on the power flows in transmission grids. Some borders, adjacent to flow-based capacity regions, are represented through net transfer capacities during market coupling. Under the current standard hybrid coupling, the utilization of grid elements in the flow-based regions due to the predicted trade across such borders is not available for trades between flow-based zones. The flow-based representation is not limited to the given capacity calculation region, but can be extended to also model the impact of trade with other regions. This so-called advanced hybrid coupling replaces the priority inherently given to trade across net transfer capacity-coupled borders by introducing virtual bidding zones. These map the effect of non-flow-based borders on line capacities in the flow-based regions, enabling the market coupling optimization to prioritize trade between flow-based bidding zones and trade across non-flow-based borders. This paper explains the mechanism of advanced hybrid coupling and how it is modeled mathematically. Based on a test network, a case study shows to what extent and why advanced hybrid coupling leads to welfare gains during market coupling and lower congestion management costs in the flow-based region.

Introducing advanced hybrid coupling: Non-discriminatory coalescence of flow-based and net transfer capacity calculation regions

TL;DR

The paper tackles non-discriminatory, efficient market coupling across flow-based and non-flow-border regions by introducing Advanced Hybrid Coupling (AHC) that uses virtual bidding zones to map the impact of non-flow borders within the flow-based region. By explicitly modeling inter-regional exchanges, AHC removes ex-ante margin reservations and allows all cross-border trades to compete for scarce capacity, improving welfare, fairness, and transparency. A model-based evaluation on a test network shows welfare gains and reduced congestion management costs within flow-based regions, while outlining how AHC shifts costs to non-flow zones and increases computational complexity. The work argues for phased EU-wide implementation of AHC to enhance capacity calculation, allocation efficiency, and grid security in future market coupling.

Abstract

Flow-based market coupling is substantially altering the computation of cross-zonal capacities for the trade of electricity in the vast majority of European markets. The main benefit of the flow-based method is improved accuracy by better representing the impact of cross-zonal trade on the power flows in transmission grids. Some borders, adjacent to flow-based capacity regions, are represented through net transfer capacities during market coupling. Under the current standard hybrid coupling, the utilization of grid elements in the flow-based regions due to the predicted trade across such borders is not available for trades between flow-based zones. The flow-based representation is not limited to the given capacity calculation region, but can be extended to also model the impact of trade with other regions. This so-called advanced hybrid coupling replaces the priority inherently given to trade across net transfer capacity-coupled borders by introducing virtual bidding zones. These map the effect of non-flow-based borders on line capacities in the flow-based regions, enabling the market coupling optimization to prioritize trade between flow-based bidding zones and trade across non-flow-based borders. This paper explains the mechanism of advanced hybrid coupling and how it is modeled mathematically. Based on a test network, a case study shows to what extent and why advanced hybrid coupling leads to welfare gains during market coupling and lower congestion management costs in the flow-based region.
Paper Structure (22 sections, 19 equations, 16 figures)

This paper contains 22 sections, 19 equations, 16 figures.

Table of Contents

  1. Motivation and theoretical background of advanced hybrid coupling
  2. Introduction and objectives
  3. Hybrid coupling: Standard vs advanced
  4. Background and general provisions
  5. Impact on capacity calculation
  6. Impact on capacity allocation
  7. Summary
  8. Model-based evaluation how advanced hybrid coupling affects market results and congestion management
  9. Setup of the study
  10. Two-days ahead uncertainty and generating units
  11. Changes in flow-based parameters due to advanced hybrid coupling
  12. Unscheduled allocated flows (UAF) and remaining available margin (RAM) in standard and advanced hybrid coupling
  13. Restrictions for cross-zonal trade in standard and advanced hybrid coupling
  14. Other model assumptions
  15. Results and implications
  16. ...and 7 more sections

Figures (16)

  • Figure 1: Capacity calculation regions Nordic, Hansa and Core. Bidding zones and CCRs based on ccrs and maps made with MapCharts. Of the Norwegian and Swedish bidding zones, only borders including NO2 and SE4 are part of the Hansa CCR.
  • Figure 2: Left: Transmission system projects in Europe based on tyndp. Right: Expected and required interconnection capacity for the energy transition scenario "2040 Green Europe" ember.
  • Figure 3: Standard and advanced hybrid coupling
  • Figure 4: Capacity calculation process in Core CCR (based on core_fbmc_workshop, p. 47)
  • Figure 5: Capacity allocation and CNEC RAM in standard and advanced hybrid coupling.
  • ...and 11 more figures