2015

Comparison of Congestion Management Techniques: Nodal, Zonal and Discriminatory Pricing

Reprint No. 2015:14

Author(s): Pär Holmberg and Ewa LazarczykYear: 2015 Title: Energy Journal Volume (No.): 36 (2) Pages: 145–166
Online article (restrictions may apply)
Preliminary version


Wholesale electricity markets use different market designs to handle congestion in the transmission network. We compare nodal, zonal and discriminatory pricing in general networks with transmission constraints and loop flows. We conclude that in large games with many producers and certain information, the three market designs result in the same efficient dispatch. However, zonal pricing with counter-trading results in additional payments to producers in export-constrained nodes, which leads to inefficient investments in the long-run.


Reference:
Holmberg, Pär and Ewa Lazarczyk (2015), "Comparison of Congestion Management Techniques: Nodal, Zonal and Discriminatory Pricing". Energy Journal 36(2), 145–166.

Pär Holmberg

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Interdisciplinary European Studies

The European Union and the Return of the Nation State

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This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

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