Capacity Mechanism Simulator in the Swedish Electricity Market

Sammanfattning: A short history of the Swedish electricity market has been portrayed showing the process of a regulatedmarket to how the deregulation of the electricity market has evolved. The model used in this paper is an adaptation ofthe article “Transmission and generation investment in electricity markets: The effects of market splitting and networkfee regimes,” by Grim, Martin, Schmidt, Weibelzahl, and Zött for the current Swedish regional market showing thecost of investment per regional zone. The results showed that zones one (SE1) and two (SE2) were the least expensivewhile zone four (SE4) was the most expensive zone when investing in offshore wind park. The process could beconsidered as extremely long with inland wind park due to Swedish regulation, the municipalities veto rights. It isrecommended an overview of the legislation in place and a commitment from the government to change the developmentand incentive in renewable investment from the private sector. Otherwise, it could be very difficult to promoteinvestments in offshore wind parks.