market coupling, implicit auctions, day-ahead electricity market, Slovenia


On the Slovenian-Austrian border cross-zonal capacities (CZCs) are currently allocated at explicit auctions, although in the future to comply with the European Target Electricity Model one can expect implicit auctions within market coupling to be implemented. Via a simulation, this paper aims to study the impact of implicit electricity market coupling on the Slovenian-Austrian border on the efficiency of CZC allocation and social welfare in Slovenia. The simulation results show that the use of implicit auctions would increase the efficiency of CZC allocation, reduce the price of electricity and increase the volume of trading in the Slovenian electricity exchange market. Further, implicit market coupling on the Slovenian-Austrian border would increase social welfare in Slovenia.