Electricity Market Model

The Electricity Market model enables the simulation of future electricity generation in the European network grid system. This allows predictions for the evolution of electricity prices and emissions produced by fossil power plants. Thanks to the hourly modelling, it is also possible to make statements about the supply situation in critical situations. The model equally maps flexible consumers such as electrolysers, electric boilers, heat pumps, and electric cars, in detail, to generate results for evaluating various flexibility options.

The Prognos Electricity Market model illustrates large-scale power plants in Europe, with an output of 50 MW or more. It simulates the use of the individual power plant units on an hourly basis until 2050. In the model, the power plant is used realistically according to the respective load demand according to the marginal cost logic (merit order).

The plant with the lowest marginal costs is used first, and all other plants are classified according to their marginal costs until the load is covered for each hour of the period under consideration. Thus, the price is determined by the last power plant to be used, the one with the highest marginal costs. Electricity storage systems (in particular storage hydroelectric plants) are taken into account in the planning of the deployment.

These plants supply at marginal costs, so that the yield of these plants is maximised over the year. Pumped-storage power plants, storage hydroelectric plants, and battery storage power plants use spreads in electricity prices to maximise their returns.

Flexible consumers such as electrolysers, heat pumps, and electric vehicles optimise their electricity supply as far as possible without breaching constraints.