Model-based assessment of removing distortions in the European electricity market in view of the EU 2030 targets

Leading the way to the completion of the EU internal electricity market (IEM) needs to assess the impact of prevailing market distortions, which hinder the market efficiency. This paper focuses on quantifying the impacts of removing these distortions in the EU market operation in view of the EU 2030 targets. We use a detailed electricity market simulation model, PRIMES-IEM, which performs an hourly simulation of the sequence of the electricity markets, day-ahead, intra-day and balancing, over the EU interconnected system. By running a number of scenarios, which differ on the assumptions of market design and policy measures and comparing their results, we provide a quantitative evaluation of the benefits of removing distortions and allows ranking the distortion removals by importance. The distortions regard among others, the availability of inter-connection capacities in the various market stages, priority dispatch privileges for RES and the coordinated management of reserves.