The paper is result of research different cross-border electricity trading
mechanisms impact. Focus is on investments in generation and transmission
power system facilities in regional market. Assumptions include efficient
market coupling mechanism (with more bidding zones), use of additional
investment indicators (like social welfare and congestion cost) and security
of supply issues (capacity mechanisms). There is discussion on cost benefits
analysis for particular market participants and there is possibility of risk
reduction for regional power system expansion. It is shown current
state-of-the-art, problems and trends in solving some aspects of market
integration and investment issues. In some cases smaller and well defined
bidding areas are absolutely essential in order to ensure system security and
economic efficiency. There is no single criterion for power system expansion
but it is possible to use combination of incentive schemes and possible
through one index for cross-border trade. Risk management for cross-border
electricity trading through several areas needs to be upgraded with use of
financial transmission rights like weighted average area prices,
respectively. Regional power system security is closely associated with
timely investments in energy supply in line with economic development and
environmental needs. Security of supply indicator is deriving an estimation
of security of supply improvement from the market based simulation results
when a generation or transmission investment project is implemented. All
researched makes market integration and investments in Europe more efficient
and gives more correct signals to market participants in regional market