Five indicators for assessing bidding area configurations in zonally-priced power markets

Sarfati, Mahir; Hesamzadeh, Mohammad Reza; Canon, Alexandre

doi:10.1109/pesgm.2015.7286517

Cited by 8 publications

(9 citation statements)

References 8 publications

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“…The third stream of papers departs from basing the assessments on the existing PZC (e.g. [Burstedde 2012;Breuer 2014;Felling and Weber 2018;Imran et al 2008;Van den Bergh et al 2016;Sarfati et al 2015;Kłos et al 2014]). They address the question of how to determine new price zones, what we henceforth refer to as long-term price zone reconfiguration process.…”

Section: Introductionmentioning

confidence: 99%

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Flow-Based Market Coupling Revised - Part II: Assessing Improved Price Zones in Central Western Europe

2019

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Part I of this two-part paper has presented flow-based market coupling (FBMC), the implicit congestion management method used to couple the Central Western European (CWE) electricity markets. It has also introduced a large-scale model framework for FBMC assessments, focusing on modeling the capacity allocation and market clearing processes. The paper at hand lays the focus on the newly developed redispatch model, thereby completing the description of the overall model framework. Furthermore, we provide a case study assessing improved price zone configurations (PZCs) for the extended CWE electricity system. Our case study is motivated by the ineffectiveness of managing congestion of intra-zonal lines described in Part I and by the possibility to reduce their relevance by improved PZCs. The importance of this study is substantiated by the controversial discussions on the currently-existing PZC. Thus, we assess the existing PZC and five novel PZCs determined by a cluster algorithm. Our results show that improved PZCs can reduce redispatch quantities and overall system costs significantly. Notably, we show that substantial improvements are possible when redesigning PZCs while maintaining a similar or slightly increased number of price zones. Moreover, under use of the theoretical considerations in Part I, we explain that increasing the number of price zones may not always increase welfare when using FBMC.

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Section: Introductionmentioning

confidence: 99%

“…These algorithms use information at the level of (aggregated) grid nodes/transmission lines, i.e. locational marginal prices (LMPs) in [Burstedde 2012;Imran et al 2008;Breuer 2014;Felling and Weber 2018] or power transfer distribution factors (PTDFs) [Sarfati et al 2015;Kłos et al 2014…”

Section: Introductionmentioning

confidence: 99%

Flow-Based Market Coupling Revised - Part II: Assessing Improved Price Zones in Central Western Europe

2019

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“…Further algorithms based on LMPs are applied in (Wawrzyniak et al, 2013;Imran and Bialek, 2008). In contrast to the LMP-based methodology, cluster algorithms based on PTDFs are applied by (Bergh et al, 2016;Sarfati et al, 2015;Klos et al, 2014;Kang et al, 2013;Wawrzyniak et al, 2013;Duthaler et al, 2012). (Bergh et al, 2016) also investigate improved PZCs for CWE and Italy, Czech Republic and Poland.…”

Section: Literature Reviewmentioning

confidence: 99%

Solving the Bi-level Problem of a Closed Optimization of Electricity Price Zone Configurations using a Genetic Algorithm

Felling

2019

SSRN Journal

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The topic of alternative price zone configurations is frequently discussed in Central Western Europe where-so far-national borders coincide with borders of price zones. Reconfiguring these price zones is one option in order to improve congestion management, foster trading across borders of price zones and, thus, to increase welfare. In view of the significant increase in redispatch volumes and costs over the last years due to increasing feed-in from renewable energy sources in conjunction with delayed grid expansion, this topic has gained in importance. To determine these improved price zone configurations for a large-scale system like Central Western Europe, often either configurations based on expert guesses are considered or heuristics using approximate criteria like locational marginal prices are used to obtain price zones through clustering. In contrast, the present paper formulates a bi-level optimization problem of how to determine optimal configurations in terms of system costs and-given the size and nature of the problem-solves it with a specially developed genetic algorithm. Resulting price zone configurations are compared to both exogenously given, expert-based price zone configurations from the Entso-E bidding zone study and endogenously assessed configurations from a hierarchical cluster algorithm. Results show that the genetic algorithm achieves best results in terms of system costs. Moreover, the comparison with solutions from a hierarchical cluster analysis reveals important drawbacks of the latter methodology.

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“…In contrast to the LMP-method (Duthaler, 2012), (Kang et al, 2013), (Klos et al, 2014), (Kłos et al, 2015), (Sarfati et al, 2015) and (Bergh et al, 2016) apply cluster algorithms based on PTDF-values. (Kłos et al, 2015) aim to reduce loop effects by clustering PTDF values.…”

Section: Investigate Zonal Solutions Based Onmentioning

confidence: 99%

“…(Kang et al, 2013) investigate the IEEE-39 system for a given number of zones. (Sarfati et al, 2015) consider new delimitations based on five indicators, e.g. loop flows or price convergence on a 32-node model of the Nordic system.…”

Section: Investigate Zonal Solutions Based Onmentioning

confidence: 99%

Consistent and robust delimitation of price zones under uncertainty with an application to Central Western Europe

Felling

2018

Energy Economics

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New and alternative delimitations of price zones for Central Western Europe (CWE) might constitute a mid-term solution to cope with the increasing congestion in the electricity transmission grids. The significantly growing infeed from renewable energy sources puts more and more pressure on the grid and emphasizes the need for improved congestion management. Thus, a new delimitation of price zones is frequently considered in current discussions and research. The present paper applies a novel hierarchical cluster algorithm that clusters locational marginal prices and weights nodes depending on their demand-and supply situation to identify possible new price zone configurations. The algorithm is applied in a scenario analysis of six scenarios reflecting main drivers that influence the future development of European Electricity markets in line with the trilemma of energy policy targets. Robustness of the new configuration is an important criterion for price zone configurations according to the European Guideline on Capacity Allocation and Congestion Management (CACM). Therefore, a robust price zone configuration is computed taking into account all the six individual scenarios. Results show that shape, size and price variations of price zones on the one hand strongly depend on the individual scenario. On the other hand, the identified robust configuration is shown to outperform other configurations, particularly also the current price zone configuration in CWE.

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Five indicators for assessing bidding area configurations in zonally-priced power markets

Cited by 8 publications

References 8 publications

Flow-Based Market Coupling Revised - Part II: Assessing Improved Price Zones in Central Western Europe

Flow-Based Market Coupling Revised - Part II: Assessing Improved Price Zones in Central Western Europe

Solving the Bi-level Problem of a Closed Optimization of Electricity Price Zone Configurations using a Genetic Algorithm

Consistent and robust delimitation of price zones under uncertainty with an application to Central Western Europe

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