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4281. Hybrid Electricity Market Models: Combining Zonal and Nodal Pricing for Congestion Management
Invited abstract in session MB-9: Electricity Market Design, stream Energy Markets.
Monday, 10:30-12:00Room: 10 (building: 116)
Authors (first author is the speaker)
| 1. | Endre Bjørndal
|
| Department of Business and Management Science, NHH Norwegian School of Economics | |
| 2. | Benjamin Fram
|
| Dept. of Business and Management Science, NHH Norwegian School of Economics | |
| 3. | Mette Bjørndal
|
| Department of Business and Management Science, NHH Norwegian School of Economics |
Abstract
Regulators in Europe are pushing for increased synchronization between European electricity markets. While this market coupling promises higher market efficiency and welfare gains, it also presents challenges for market administrators and grid operators who must manage congestion between market areas.
In this paper, we propose several novel hybrid pricing models for congestion management in electricity markets. Hybrid models manage congestion by allowing certain market areas to use nodal pricing and others to use zonal pricing and have been previously shown to offer significant welfare improvements over zonal pricing models. We present two classes of hybrid models: simultaneous and sequential. Simultaneous models clear the market in a single step where nodal and zonal pricing areas are both cleared at once. Sequential models first clear a fully zonal model, fix the resulting power flow quantities between market areas, and then re-clear the nodal pricing areas in a second modelling step. We also present several subvariants of these models where we aggregate, partially disaggregate, and fully disaggregate the transfer capacities of lines connecting market areas.
Keywords
- Electricity Markets
Status: accepted
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