  The current stage in the evolution of the European internal energy market for
electricity is defined by the transformation towards a renewable energy system.
The Clean Energy Package aims to ensure that methods for capacity allocation
and congestion management, that are at the center of the European internal
market for electricity, align with this transformation.
  Flow-based market coupling, the preferred method for capacity allocation, is
first and foremost a formal process to allocate exchange capacities to the
markets. However, the process also allows for many considerations of the
involved parties that impact the resulting capacities. As part of the Clear
Energy Package, the regulatory body enacted their ambition to increase exchange
capacities by enforcing transmission system operators to allocate a minimum
margin of physical line capacity with the goal of providing a higher level of
competition and better integration of renewable energy sources. This study
investigates this and other policy relevant consideration of flow-based market
coupling.
  The model results quantify the trade-off between permissive capacity
allocation and increased congestion management. For high shares of intermittent
renewable generation, less constrained exchange capacities are favorable,
however also highlight the importance of the markets ability to integrate high
shares of intermittent generation. apacities are favourable, however also
highlight the importance of the markets ability to integrate high shares of
intermittent generation.
