Interaction of European Network Development and Bidding Zone Re-Configuration: Investigation for European Power System in 2030

Abstract:
The power system is constantly changing and, as one result, the European transmission grid faces extensive power flows that cause an increase in transmission grid congestions. Owing to the slow progress in transmission grid expansion, a reconfiguration of European bidding zones becomes more relevant in current discussions since the current bidding zone configuration does not meet the requirements in terms of congestions. However, transmission grid expansions and bidding zone (re-)configuration have simultaneous effects on grid congestions and span a joint solution space for an appropriate and cost-efficient development of the European power system. Within this paper, the authors propose a new method to answer the question of whether planning and realizing transmission grid expansion measures assuming the current European bidding zones as fixed is associated with additional costs in comparison to also considering European bidding zone re-configurations. In exemplary investigations, the method is applied to the European power system forecasted for 2030. Initial results show that maintaining the current European bidding zone configuration and realizing all high voltage direct current lines planned for Germany is associated with additional costs of Euro 5 respectively Euro 12 billion per year, depending on alternative grid expansions and alternative bidding zone configurations. Herein, costs comprise power generation, loss of load for congestion management purposes, monetized curtailment of power plants based on renewable energy sources, and monetized carbon dioxide emissions.