Simulation of congestion management and security constraints in the Nordic electricity market

Abstract

--Presently in the Nordic day-ahead market, zonal pricing or market splitting is used for relieving congestion between a predetermined set of price areas. Constraints internal to the price areas are resolved by counter trading or redispatching in the regulation market. In a model of the Nordic electricity market we consider an hourly case from winter 2010 and present analyses of the effects of different congestion management methods on prices, quantities, surpluses and network utilization. We also study the effects of two different ways of taking into account security constraints.

Peak Price Hours in the Nordic Power Market Winter 2009/2010: Effects of Pricing, Demand Elasticity and Transmission Capacities

“…The infeasibilities we have described above need to be resolved for this to be a functioning market solution. Similar analysis was performed for a case of an evening hour in December 2010 in [1] when security constraints for the Bergen area were active and binding and resulted in an economic infeasibility of prices at the price cap in the nodal solution. The Bergen cut constraints were relaxed to obtain feasible prices, but also to demonstrate a situation present frequently in the Norwegian power system when it operates for extended periods of time below the agreed standards, at N-1/2 or N-0 security level.…”

“…The effects of increased demand elasticity on nodal prices and the redistribution of surpluses have previously been studied for a single hour case based on the data from the Nordic electricity market (see [1]). Elasticity of demand was introduced into the bid curves on an aggregate level, specifically to the inelastic segments of the curve which include the NPS solution.…”