NorNed : an analysis of ramping restrictions and the transition from explicit to implicit auction

Abstract

This thesis presents an analysis of the Norwegian and Dutch electricity trade and differences in outcome between the explicit and the implicit market mechanism on NorNed. The price difference between Norway and the Netherlands is used to estimate the possible revenues from an implicit auction, had it taken place at the same time as the explicit. The difference in revenues turns out to be 23 million Euros from May 2008 until January 2011. Ramping restrictions that help ensure system security and amounts to 5 million Euros in the same period. Even though the losses attributed to the explicit market mechanism is overestimated as ramping is included, the introduction of the implicit auction on NorNed in January 2011 will improve efficiency considerably.