Expected impacts on the pan-European Day Ahead Power Market in the year 2040 due to the introduction of large-scale offshore wind farms

Abstract

To reach the goals set by the European Union with regard to renewable energy expansion and climate neutrality, the market uptake of offshore windfarms is an essential component. This means including large-scale units with volatile production curves in the European power grid and market. Major implications on the current system are expected. This thesis investigates the impact of the ambitious large-scale offshore wind energy expansion plans, and thus decentralized feed-in of large amounts of energy, on the European electricity market and transmission grid by simulating future scenarios for the year 2040. The growth of other renewable energy sources, namely on shore wind, photovoltaic, and hydro, is considered as well. Using the original Day Ahead Market Coupling Algorithm and historical market data, four scenarios are developed based on ENTSO-E’s Ten Year Network Development Plan and climate models SSP2-4.5 and SSP5-8.5. The study introduces Offshore Bidding Zones and models their integration into the European grid topology. The results show significant regional disparities in market clearing prices, with Central Northern European countries experiencing negative prices due to oversupply, while prices in remote regions like Ireland and Greece remain at a higher level. The findings highlight the need for improved transmission infrastructure and large-scale storage solutions to mitigate price volatility and ensure equitable access to renewable energy throughout Europe.