EOM-Plus – analysis of the short- and medium-term effects of market-based congestion instruments as a regional and temporary complement to the existing energy-only market design

The German market design in the electricity sector does not result in an explicit market-based regional control of generation, storage and demand within the uniform price zone. As a result, no regional incentives for grid-serving behaviour of electrical capacities (flexibility) are being created. The energy-only market design (EOM) provides for the unrestricted transport of electricity within the market area to ensure a high level of competition between supply and demand. However, this approach does not take into account possible restrictions in the transport of electricity (congestion) and thus the associated costs to maintain the security of supply.

Within the framework of EOM-Plus, the introduction of a smart congestion market at the regional level is being investigated. Within the framework of such a ‘smart market’, flexible and grid-serving operation of different flexibility options (generators, storage and loads) could be encouraged to participate in congestion management. Such incentive should align existing potential flexibility with the grid congestion and renewable energy generation in order to reduce regulatory intervention. Through targeted additional incentive mechanisms, which could be implemented by means of a smart market, a regional steering effect on investments in flexibility can be achieved. These measures can contribute to avoiding further bottlenecks or – without additional grid expansion – to integrating additional volumes of electricity from renewable energy sources.

Duration: 1 November 2019 – 31 October 2022

Funded by: Federal Ministry for Economic Affairs and Energy

Project partners: Institute for new Energy Systems (InES) at the Technical University of Applied Sciences Ingolstadt (THI), Friedrich-Alexander-University Erlangen-Nuremberg (FAU) and Energy Campus Nuremberg