The project objective is to identify and evaluate the performance of alternative designs for future electricity markets, including a continuation of the current market setting, in terms of their ability to meet the challenges created by the targets set in the Energy Strategy 2050.

AFEM main research questions are:

  • How will the Swiss and European electricity market evolve if the existing market mechanism (energy only market, reserve market) be perpetuated as is?
  • How will the market evolve if additional market components such as capacity markets are introduced?
  • How do future market models need to be designed in order to give the “right” investment incentive (e.g. flexibility markets) for an efficient yet carbon-free electricity supply system?

To address these questions, AFEM is developing new models to analyse the specific behaviour of future electricity supply systems in which renewable energy sources (RES) are likely to be deployed on a large scale. The expected result is to provide inputs for the evaluation of grid development strategy scenarios and market design.

In short, AFEM increases the knowledge about electricity market mechanisms, in particular with respect to coordinating short-term flexibility and long-term investment goals for policy-making activities. AFEM provides insights into the question of what future market models will be required for the second phase of the “Energy Strategy 2050” after 2020.

AFEM is part of the SNF National Research Programme “Energy Turnaround” (NRP 70).

More details about the project are available.

The ESC members involved in this project are: