For decades conventional power plants have been the predominant electricity generation technology in most countries worldwide. Therefore, there are several challenges for implementing high shares of variable renewable generation technologies in electricity systems in an efficient manner. In this work three different types of challenges of renewable generation dominated electricity markets are studied: the transmission system, the electricity market designs and flexible (dispatchable) generation technologies. To evaluate future changes in electricity systems quantitatively, the electricity market model EDisOn+Balancing has been developed. The first part of analysis contributes to the evaluation of transmission expansion planning in Austria. On the one hand, the neighbouring countries are respected as a single node per country and, on the other hand, the detailed electricity transmission grid of Central European countries is respected. In addition to analysing high shares of variable renewable generation sources in Central Europe, also conflicting tendencies in terms of renewable shares in Austria and the remaining countries are analysed. The results show that assuming the planned transmission line expansions are implemented until 2030, the Austrian transmission system is well equipped for a nearly 100% share of renewable electricity generation. Secondly, possible future balancing market mechanisms in several control areas in Central Europe are addressed, while also respecting the different balancing products and the wholesale electricity market. In Europe there exist mostly sequential energy and reserve markets with separate bidding and market clearing mechanisms, which are run by different entities, i.e. the power exchanges and the transmission system operator. It has been decided to follow in the modelling exercise the current trend in U.S. markets, where co-optimisation of energy and reserves is applied. Therefore, the model EDisOn+Balancing is designed as a multi-objective market model, i.e. balancing procurement and dispatch on wholesale electricity markets are solved simultaneously. The analysis shows that the combination of shorter balancing products, allowing common procurement of balancing capacity, and enabling other storages, like batteries and electrical vehicles, to provide balancing capacity can be one of the desired market designs. The shortening of balancing product timings supports the integration of renewable electricity generation essentially. Whereas, symmetric procurement of upand downward products for automatic and manual frequency restoration reserves shall be avoided, due to increased costs and inefficiencies. The third part is about socio-economic benefit analysis of pumped hydro storage expansions in Austria and their implications on the Central European electricity system for three different 2030 scenarios. The results show that electricity generation and balancing procurement costs are reduced by the expansion of pumped hydro storage capacities in Austria. The necessity of conventional reserve power plant capacity, mostly defined as peaking unit, decreases while maintaining a high security of supply level. Due to a shift from conventional power plants to renewable generation technologies, environmental damage costs of up to 1,300 MEuro/a can be avoided in Central Europe when implementing the planned pumped hydro storage capacity in Austria in the upcoming years. If several challenges are overcome, the integration of variable renewable energy sources can be efficient and the achievement of a sustainable electricity generation system in Central Europe is possible.