Modeling of electricity pricing in European market simulations

The increasing share of renewable energies as well as the age structure of the thermal generation stack lead to big changes in the European energy system. This paper describes a method for determining market prices for electricity based on the cost-minimal European power plant dispatch and different mark-ups. Thus, the influences of these mark-ups on simulated prices are estimated. Exemplary results are shown for Germany for a backtesting scenario of the year 2014 and a future scenario for the year 2024. The results are compared to historical price patterns and show a better match with the historic prices, but also still room for improvement.