Simulating the Energy Transition: A Market-Oriented Approach with the ATLAS model

To validate these designs and quantify their benefits, prospective simulation tools are necessary.

In addition, they can be used to help Transmission System Operators (TSOs) managing the supply-demand balance, which is the result of a complex sequence of electricity markets.

Agent-based models are a relevant tool to investigate these markets, since they allow modelling a sequence of markets at different lead times while representing individual strategies for market actors. This paper identifies a few shortcomings in models of the literature: the integration of forecasts uncertainty; the precise representation of physical assets of the power system; the modelling of design elements such as complex and linked orders; the representation of all relevant steps within an electricity market. It then introduces ATLAS, a model developed by

RTE to realistically simulate short-term electricity market processes from day-ahead to balancing. ATLAS models the behavior of market actors submitting orders across successive markets and optimizes their portfolios based on market outcomes. It is designed to answer previously mentioned shortcomings: by incorporating uncertainty in forecasts for renewable generation, consumption, and prices, and their evolution closer to real time; by representing both the sequence of markets as well as the various steps within a given market, which enables simulation of various individual responses to regulations and system conditions; by accurately modelling operating constraints of assets, such as ramping limits, and market processes like complex and block bids, capturing their impact on efficiency and prices. The model can simulate current or future electricity systems and assess how changes in market design affect actors and overall welfare. It also helps analyze the consequences of forecast errors and strategic behaviors on scarcity, prices, revenues, and risks across market phases.

ATLAS is applied to study the evolution of balancing markets by 2050. Using European system scenarios for 2030 and 2050, the model simulates a full chain of markets—day-ahead, intraday, and the Replacement Reserve (RR) balancing market—over several days. The analysis focuses on RR results to evaluate the impact of the energy transition on supply security, balancing costs, and socio-economic welfare. Key indicators include balancing needs, bid curve composition, cross-border transmission usage, and counter-activations, where reserve offers match each other rather than system imbalances. Findings show how balancing markets can address challenges from the energy transition and reveal that counter-activations may turn these markets into near real-time economic dispatch tools, influencing actor behavior across all market stages.