Capacity allocation using the flow-based method

Abstract: Since 2000 the European electricity market has been opened and has had for main purpose the consolidation of the competition thanks to the increase of the numbers of actors. Today the electricity market catches up more to a juxtaposition of regional or national markets than to a real integrated market. Indeed cross-border  ongestions run counter to the elaboration of a competitive market. In that context the optimal utilization of the available capacities is a major issue. Some progresses have already been realized concerning the allocation, with the setting up of explicit auctions and market coupling. The economical gain will now come from a best evaluation of the available margins for the cross-border exchanges. This improvement could be realized thanks to the flow-based method. This master thesis is part of a Research and Development project which aims first of all at validating the efficiency and robustness of the flow-based method and also at setting up the tools and procedures for an operational use of this method. The present master thesis report explains the interest of the flow-based method compared with the method based on Available Transfer Capacity before explaining the principle of the Flow-based method. Finally the report exposes different tests to analyze the flow-based method. The results obtained show that the adoption of flow-based method will be a real improvement but will require a total coordination of all the actors concerned. This report aims to be useful for people who have to work on a project related to the crossborder exchanges. The other aim of this report is to be understandable by the lay person. Thus it will be useful for anybody who is interested in cross-border electricity exchanges even if it is not his domain of study.