Abstract

The generation of electricity from offshore wind farms is becoming increasingly important for the European electricity market. This also poses a challenge for the configuration of the market, which is based on bidding zones where a uniform electricity price applies and internal transmission barriers are not considered. One potential tool for integrating offshore wind farms with the electricity market could be offshore bidding zones. However, the solution proposed by the European Commission does not take into account the procedures for establishing bidding zones and causes competitive distortion for farms located in these zones compared to those integrated with the power system in a traditional manner (radially). Consequently, approaches are created that are difficult to reconcile with those on land and may lead to the emergence of incorrect price signals. This article, viewed from a regulatory perspective, discusses the potential negative impact of offshore bidding zones on the electricity market.