Impact of the Abuse of Dominance in the EU Coupled Intraday Electricity Markets on the Integration of Renewable Energy Sources (RES)

Abstract

The article is devoted to a problem of the abuse of dominance in the EU coupled intraday electricity markets and the consequences of such abuse for the integration of RES generation. The relevance of the study is due to the increased interest in the role of competition policy in achieving sustainable development goals. The problem under consideration is revealed by an example of an investigation by the UK Office of Gas and Electricity Markets (Ofgem) into EPEX electricity exchange about the abuse of dominance at coupled intraday auctions between Ireland and the UK. The following results were obtained in the study. Firstly, it is established that the abuse of dominance in coupled intraday electricity markets may manifest itself in access denial by the essential facility owner (EPEX) for its competitors (Nord Pool power exchange) to the necessary infrastructure for coupled intraday auctions (shared order book). Secondly, it is proven that the coupled intraday electricity market is an important mechanism for integrating RES generation into the energy system due to the possibility of real-time trading and optimization of cross-border capacity allocation between coupled markets. Thirdly, it is revealed that access denial for competitors to the shared order book for coupled intraday auctions reduces the liquidity of the considered market due to the cut-off of some bidders. It is shown that reduced liquidity of the intraday electricity market hinders elimination of imbalances in the energy system arising from the volatility of power generation from RES. Therefore, it is concluded that the violation of competition in the coupled intraday electricity markets via abuse of dominance can hinder the cost-effective integration of RES generation and greening of the power industry.