The effect of the Austrian-German bidding zone split on unplanned cross-border flows

Abstract

In 2013, TSOs from the Central European Region complained to the Agency for the Cooperation of Energy Regulators because of increasing unplanned flows that were presumed to be caused by a joint German-Austrian bidding zone in the European electricity market. This paper empirically analyses the effects of the split of this bidding zone in 2018 on planned and unplanned cross-border flows between Germany, Austria, Poland, the Czech Republic, Slovakia, and Hungary. For all bidding zones, apart from the German-Austrian one, planned flows increased. Further, I find that around the policy intervention between 2017 and 2019, unplanned flows between Germany and Austria as well as for the Czech Republic and Slovakia decreased. However, for Poland increasing unplanned flows are found.