An Enhanced Calculation Method of Generation Shift Keys in Flow Based Market Coupling

Coupling of Day-Ahead Electricity Markets (DAM) is one of the key issues we have to deal with in order to step forward in the completion of the European Internal Energy Market (IEM). This paper reviews how the reduction of power generation from zonal to nodal level in grid models affects the economic efficiency of market coupling schemes, especially those with high granularity, flow-based network constraints. In our research we investigated whether a unified mechanism for determining Generation Shift Keys (GSK) was advantageous and examined which strategy is the most beneficial to use in a harmonized approach. As the grid model showed, a distinct correlation can be identified between the harmonization level of GSK determining strategies and the economic efficiency of the market which is detectable in the changes of market welfare.