Public defence in mechanical engineering Anahita Farsaei

Opponent Professor Samuli Honkapuro, LUT University Finland

Custos Professor Sanna Syri, Aalto University, School of Engineering, Department of Mechanical Engineering

Electricity market can play a vital role in reducing CO2 emission in Europe. The share of wind power is significantly increasing in the Nordic countries to combat climate change. The current war in Ukraine has highlighted the importance of increasing the share of renewable energy in the power sector to make the European countries more independent from Russian energy. This thesis has analysed competition situation on different electricity markets and how competition situation is changing with the implementation of renewable energy. The results confirm that electricity markets in Finland and the Baltic countries have become less concentrated by the growing amount of wind power. However, in Iran which has a different market structure, as the demand decreases, the exercise of market power increases. This thesis has also modelled the Nordic-Baltic electricity market in future scenarios, where Finland is abandoning coal use for energy purposes, and in longer term, where carbon dioxide emissions from electricity generation will be reduced to almost zero. The long-term electrical capacity scenarios were developed by Chalmers University as part of their global optimization modelling. This dissertation analysed the regional electricity market impacts of these scenarios. The impacts of alternative amounts of nuclear power and transmission capacity between the countries of the region were analysed. Transmission expansion and nuclear power increase in Sweden can reduce the prices in Finland by 11% compared to the scenario with transmission expansion where there is no nuclear power in Sweden. The CO2 intensity of electricity generation in the region would decrease to 10 gCO2/kWh in the scenario with transmission expansion and nuclear power in Sweden, as these countries are switching to renewable electricity. Transmission expansion has a key role for the future Baltic electricity market, as it can reduce average total electricity system cost for the Baltic countries. Also Finland would benefit from transmission expansion and Sweden maintaining its nuclear power lower as lower system costs.