Impact of a Minimum Remaining Available Margin Adjustment in Flow-Based Market Coupling

Flow-Based Market Coupling (FBMC) is used to calculate available day-ahead transmission capacities in Central Western Europe (CWE) since 2015. National Regulatory Authorities claimed for a minimum Remaining Available Margin (minRAM) to increase capacities for commercial exchanges, thus Transmission System Operators adjusted the FBMC algorithm in April 2018. This paper makes a contribution to the evaluation of the algorithm's modification, by applying the market and grid simulation framework Model of International Energy Systems (MILES). MILES calculates flow-based cross-border capacities, and simulates generator's dispatch in Europe considering FBMC to finally determine transmission systems' operational state. The minRAM capacity offered to the market is varied to investigate its effects on market clearing, system's costs and grid's utilization. The results indicate a significant correlation between a minRAM, economic welfare and grid utilization. Certainly a higher minRAM goes along with decreasing costs, but transmission grid's utilization increases simultaneously, resulting in an increasing demand for remedial actions.