European Market Integration With Mixed Network Representation Schemes

Abstract

A centralized market-splitting algorithm is implemented in this paper in a Europe-wide level, comprising both power pools and Power Exchanges, with each local/national market respecting the standard constraints imposed by its own regulatory framework, including the full set of unit technical/commitment constraints and system operating constraints in power pools. In view of the forthcoming large-scale RES penetration, physical markets with unit-based offers (either pools or PXs) check the feasibility of the electricity market solution against their internal (intra-zonal) transmission network constraints, considering full network topology. This is accomplished through an iterative process, iterating between the overall optimization algorithm, and intra-zonal power flows of the countries/regions, which identify possible congestions and incorporate additional constraints in the central pan-European market-splitting problem. The iterative process terminates when all internal transmission constraints are satisfied. Locational marginal prices (LMPs) can be computed in the physical markets, whereas zonal/system marginal prices are computed in markets with portfolio-bidding schemes. The proposed algorithm is tested in terms of computational efficiency using the full UCTE network.Index Terms-Internal electricity market, market splitting, mixed integer linear programming, power exchange, power pool, power transfer distribution factors.

Redispatch index for assessing bidding zone delineation

“…In practice, the nodal dispatch can be obtained from a transmission-constrained unit commitment, as described in [3], written as the following optimisation problem:…”

“…This provides local insight on the most relevant investment opportunities [2]. Zonal pricing delivers energy prices that are uniform at a regional level, which generally (i) obliges network operators to redispatch flexible units to manage potential congestions [3], (ii) provides investment signals that are less sensitive to upgrades of the infrastructure and thus reduce risk for investors.…”

Impact of Inter- and Intra-Regional Coordination in Markets With a Large Renewable Component

“…Constraints (2i) guarantee the network feasibility after the deployment of reserves and equation (2j) fixes the voltage angle of the reference node to zero. The variable declarations of model (2) are included in the set of constraints (2k).…”

“…In Setup 2C we explore different equilibria in case of an incomplete transmission market and no operating reserves. Table III summarizes the results, separated by a slash, in cases of: i) -and ii) -, where operator I evaluates higher either the capacity of interconnection (3,6) or (2,4), respectively. Considering these two normalized equilibrium points, it becomes apparent that in the absence of an organized market for the interconnection capacity, the power system operation becomes completely unpredictable.…”

“…This reduced grid representation, where internal network is treated as a copper plate, may result into infeasible real-time power flows due to transmission congestion. Nevertheless, recent literature [2], [3] proposes alternative approaches to account also for the intra-zonal network feasibility, based on a centralized market-splitting algorithm that integrates diverse market designs, i.e., power pools or power exchanges.…”