Integration of Offshore Bidding Zones under Advanced Hybrid Coupling

Building on the North Sea Wind Power Hub collaboration, Energynautics and Ea Energy Analyses supported transmission system operator TenneT in evaluating bidding zone designs for hybrid offshore wind farms. The analyses builds on a 2037 scenario primarily drawn from ENTSO-E’s TYNDP Distributed Energy and Germany’s Netzentwicklungsplan (NEP). The overall market scenario build is supplemented with a corresponding EU wide grid topology engineered by Energynautics. Of particular importance was the detailed representation of the EU market trade. Consequently, the study was conducted as a Flow-Based Market Coupling (FBMC) market model, incorporating n-1 secure grid constraints derived from the future grid topology to analyze Advanced Hybrid Coupling (AHC) effects. Subsequently, an n-1 optimal redispatch was necessary to assess the total system costs. 

Software and Modelling 

Capturing the interplay between markets and physical flows required an iterative loop between two open-source tools: Balmorel for scenario building, market optimization and economic evaluation (Ea Energy Analyses), and PyPSA for grid analysis, iterative buildout, FBMC constraint engineering and presolving, as well as redispatch optimization (Energynautics). This methodology quantified the “hidden” costs of grid congestion. 

Market Integration of Hybrid Interconnectors  

The shift from traditional radial offshore wind—where turbines are linked to a single onshore point—to hybrid configurations represents a fundamental transition from simple generation to dual-purpose infrastructure. Historically, offshore assets served only to feed local grids; however, modern hybrid designs function simultaneously as a connection for offshore generation and cross-border interconnectors. 

While this dual role unlocks significant potential for increased cross-zonal trade and enhanced European market integration, it introduces substantial complexity into the market design. Balancing wind injection with commercial trade requires a sophisticated framework to allocate capacity without compromising system security. To address this complexity, two primary market setups were evaluated: 

• Offshore Bidding Zones (OBZ): Offshore hubs were configured as separate bidding zones. 

• Home Market (HM): Offshore hubs were allocated to existing onshore bidding zone. 

Key Findings 

The study provides insights in the effects of market setup on both market revenues as well as total system costs. Moreover, the results support a better understanding of the effects of flow-based market coupling related to offshore bidding zones. The key take-aways are: 

• System cost efficiency vs. Developer Revenue: Although the Home Market model yields higher revenues for developers, it leads to less efficient dispatch overall increasing the redispatch needs and thus total system costs. An important consideration is the implementation of the Home Market setup: A Home Market with full exemption from the 70% rule performs similarly to the OBZ setup in terms of overall efficiency, while a Home Market setup without such exemptions shows considerably higher redispatch needs and subsequent system cost. Without exemption from the 70% in a Home Market setup, at least 70% of interconnector capacity would be allocated to the market regardless of expected wind output, meaning the effectively scheduled flow would surpass the physical limits. 

• Grid Transparency and System Security: The Offshore Bidding Zone model reflects the physical grid more accurately and therefore strengthens overall system security. By aligning market outcomes more closely with actual grid capacities, the OBZ framework enables more reliable and costoptimal system operation compared to the HomeMarket setup. 

• Flow-based market coupling: For the simulated topology specifically, the results suggests that flow-based effects can occur but not necessarily negatively impact developers revenues. 

These insights contribute to building knowledge on the future market integration of offshore hybrid projects. More specifically, the study provides first indications of potential flowbased marketcoupling effects. Although the results dependent on the assumed hybrid project and the overall scenario, they provide a solid foundation for understanding how offshore wind is dispatched within an offshore bidding zone.