The potential of a bidding zone reconfiguration to foster an expansion of renewable energy production capacity in Sweden

Abstract: Effective electricity market design plays an important role in facilitating the transition to a sustainable energy system, and a well-structured electricity market has proven to be crucial in the expansion of renewable energy production capacity. One way of designing the electricity market is by implementing bidding zones, which Sweden did in 2011. The structure of the Swedish bidding zones is however currently being reviewed by the Swedish TSO, and alternative bidding zone configurations are being evaluated based on how they potentially could impact the future energy market. One of the aspects that is evaluated is how the bidding zone reconfiguration could effect the energy transition in Sweden. This thesis aims to investigate and assess how an alternative bidding zone configuration could perhaps foster an expansion of renewable energy production capacity in Sweden, by simulating the dispatch and build out of renewable production capacity in Sweden for the years between 2024 to year 2040.