Post 2020 framework in a liberalized electricity market with a large share of Renewable Energy Sources


The IEE-funded project Market4RES investigates the potential evolution of the Target Model (TM) for the integration of EU electricity markets in line with the 2020 objectives and their follow up towards reaching de-carbonization goals of 2050 that will enable a sustainable, functioning and secure power system with large amounts of renewables.

The TM has so far already demonstrated significant benefits, but implementation constraints coupled with interactions between other policy objectives have lately emerged, increasing the challenges to fully extract benefits from the TM.

Therefore the goals of the study are the following:

• Facilitate an open and transparent dialogue on the potential evolution of the EU TM after 2020;
• Recommend steps for the adaptation of the existing power market design to optimize RES–E integration up to 2020;
• Suggest market mechanisms facilitating the EU-wide deployment of variable renewable electricity, including the most suitable features for electricity markets able to aggregate flexible consumption with variable RES production for cross-border trading;
• Recommend proposals for incentivizing market-based investments in power generation departing from nationally fragmented approaches in Member States towards a pan-European market-based approach;
• Identify and recommend steps for the implementation of policy, legislation and regulation options across the renewable energy sectors;
• Identify and recommend concrete steps so relevant market actors can accept and adopt the main results of the project.

In this project, 3E is in particular involved in the analysis of the existing and future market distortions when having high shares of RES-E penetration, by means of empirical case studies and detailed statistical time series analysis of the short-term markets and the medium-to-long term markets. Relevant indicators (e.g. ratio market price versus fuel prices and its correlation with RES-E penetration) that can be compared over the years and across different countries will be developed. The successful electricity market design elements world-wide for the different market time frames will moreover be scanned and best-practices, lessons learnt and transferability checks will be conducted for the European electricity market.