HydroFy Final Report : Recent developments in European power market design – with implications for hydropower

The ongoing energy transition is profoundly transforming power systems. The change of paradigm that is taking place in the power sector leads to questioning the current market design. As reservoir hydro-power is a renewable, low-carbon, dispatchable, and cheap source of electricity, it will play an essential role in decarbonized power systems. This report gives an overview of recent developments in European power market design, with a focus on hydropower. It presents general trends related to the energy transition, recently implemented measures and market designs that are considered for implementation in Europe. We observe that power market design creates conflicts between and within dimensions of the energy trilemma. Moreover, various constraints and failures in wholesale markets create a need for complementary markets. Alternative market designs need to be assessed, namely to understand their impacts on hydropower so that it contributes to achieving reliable, sustainable and affordable future power systems