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Electricity Market Model


The Electricity Market model enables the simulation of future electricity generation in the European network grid system. This allows predictions for the evolution of electricity prices and emissions produced by fossil power plants. Thanks to the hourly modelling, it is also possible to make statements about the supply situation in critical situations. The model equally maps flexible consumers such as electrolysers, electric boilers, heat pumps, and electric cars, in detail, to generate results for evaluating various flexibility options.

Model core

The Prognos Electricity Market model illustrates large-scale power plants in Europe, with an output of 50 MW or more. It simulates the use of the individual power plant units on an hourly basis until 2050. In the model, the power plant is used realistically according to the respective load demand according to the marginal cost logic (merit order).

The plant with the lowest marginal costs is used first, and all other plants are classified according to their marginal costs until the load is covered for each hour of the period under consideration. Thus, the price is determined by the last power plant to be used, the one with the highest marginal costs. Electricity storage systems (in particular storage hydroelectric plants) are taken into account in the planning of the deployment.

These plants supply at marginal costs, so that the yield of these plants is maximised over the year. Pumped-storage power plants, storage hydroelectric plants, and battery storage power plants use spreads in electricity prices to maximise their returns.

Flexible consumers such as electrolysers, heat pumps, and electric vehicles optimise their electricity supply as far as possible without breaching constraints.

Application examples and projects

Electricity price forecast 2023

| Project

In the medium and long term, average wholesale electricity prices are above the 2019/2020 level. Our updated scenarios for the vbw.

Electricity price forecast

| Project

How will the price of electricity develop over the next few years? A scenario calculation of wholesale electricity prices for the vbw.

Climate-neutral electricity sector 2035

| Project

This analysis for Agora Energiewende shows how the transformation of the German electricity sector can succeed by 2035.

Energy projections 2030/2050

| Project

On behalf of the Federal Ministry of Economics, Prognos has determined whether the Federal Government’s climate protection package will be enough for Germany to achieve its climate targets by 2030.

Energy Perspectives Switzerland 2050+

| Project

What might a climate-neutral energy system in Switzerland look like in 2050? Prognos modelled the Energy Perspectives 2050+ on behalf of the Swiss Federal Office of Energy.

More on this model

Model type

Agent-based simulation model

Modelled dimensions

  • Time (hourly)
  • Power plant use
  • Renewable generation
  • Flexible consumers
  • Electricity storage
  • Fuel demand
  • Emissions
  • Prices

Region covered

European grid system

Time frame

2000 to 2060


  • Core energy market data register
  • European power plant databases
  • National energy and climate plans from different countries
  • ENTSO-E transparency data


  • Electricity demand from demand models
  • Fuel prices


  • Electricity prices
  • Fuel requirements
  • Emissions
  • Electricity trade volumes


Feel free to contact us.

Dr Almut Kirchner

Partner, Director

+41 61 32 73 331

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