Integration of, and Competition between, Electricity Market Places

A new phase in the integration of the European electricity industry has been initiated with the coupling of physical trade on different regional market places. Some developments have already taken place, mostly based on bilateral agreements between regional players, but a more comprehensive approach is currently being taken by regulators in North-Western Europe, with the aim of subsequently extending the process to the rest of Europe. The coupling of trade not only raises question about how to harmonize market places and efficiently utilize physical interconnectors, but also how to handle competition between different market places. Such competition is already present in the UK, as well as in certain regions of Germany, but further integration may increase the extent of rivalry between market places. In this project, we study challenges raised by market coupling.