Determination of Preloading of Transmission Lines for Flow-Based Market Coupling

For the international electricity exchange in the European electricity market, the preloading of transmission lines and thus the available capacity of grid lines for cross-border trading is of great importance. The line capacity can influence exchange volumes and welfare significantly but it should also avoid congestions. Especially for Flow-Based Market Coupling (FBMC), capacities should be allocated accurately. So far, there is no standardized approach for determining these capacities for modeling FBMC in future simulations. In this paper, three methods of determining the critical grid lines, their line preloading and final capacities are presented. Exemplary applications of these methods for scenario simulations show that each method can lead to slightly different market results. On the basis of these results, it is explained why assumptions for the parameter determination are hard to meet. Furthermore, the role of minimum capacities is discussed.