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740. Evaluating Offshore Electricity Market Design Considering Endogenous Infrastructure Investments: Zonal or Nodal?

Invited abstract in session MD-14: Modelling European market coupling , stream Energy Markets.

Monday, 14:30-16:00
Room: 16 (building: 116)

Authors (first author is the speaker)

1. Kenneth Bruninx
TU Delft

Abstract

Policy makers are formulating offshore energy in-
frastructure plans, including wind turbines, electrolyzers, and
HVDC transmission lines. An effective market design is crucial
to guide cost-efficient investments and dispatch decisions. In this talk, we jointly discuss the impact of offshore market design
choices on the investment in offshore electrolyzers and HVDC
transmission capacity. We present a bilevel model that incorpo-
rates investments in offshore energy infrastructure, day-ahead
market dispatch, and potential redispatch actions near real-time
to ensure transmission constraints are respected. Our findings
demonstrate that full nodal pricing, i.e., nodal pricing both
onshore and offshore, outperforms the onshore zonal combined
with offshore nodal pricing or offshore zonal layouts. While
combining onshore zonal with offshore nodal pricing can be
considered as a second-best option, it generally diminishes the
profitability of offshore wind farms. However, if investment costs
of offshore electrolyzers are relatively low, they can serve as
catalysts to increase the revenues of the offshore wind farms.
This work contributes to the understanding of market designs
for highly interconnected offshore power systems, offering in-
sights into the impact of congestion pricing methodologies on
investment decisions.

Keywords

Status: accepted

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