2020

Simulation and Evaluation of Zonal Electricity Market Designs

Reprint No. 2020:53

Author(s): Mahir Sarfati and Pär HolmbergYear: 2020 Title: Electric Power Systems Research Volume (No.): 185 (August)
Online article (restrictions may apply)
Preliminary version


Zonal pricing with countertrading (a market-based redispatch) gives arbitrage opportunities to the power producers located in the export-constrained nodes. They can increase their profit by increasing the output in the day-ahead market and decrease it in the real-time market (the inc-dec game). For a six-node and a 24-node system, we numerically show that this leads to large inefficiencies in a standard zonal market. We also show how the inefficiencies can be significantly mitigated for these two examples by changing the design of the real-time market. We consider a two-stage game with oligopoly producers, wind-power shocks and real-time shocks. The game is formulated as a two-stage stochastic Equilibrium Problem with Equilibrium Constraints (EPEC), which we recast into a two-stage stochastic Mixed-Integer Linear Constraints (MILC).


Reference:
Sarfati, Mahir and Pär Holmberg (2020), "Simulation and Evaluation of Zonal Electricity Market Designs". Electric Power Systems Research 185(August), .

Pär Holmberg

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Interdisciplinary European Studies

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