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The definition of bidding zones is a relevant question for electricity markets. The bidding zones can be identified starting from information on the nodal prices and network topology, considering the operational conditions that may lead to congestion of the transmission lines. A well-designed bidding zone configuration is a key milestone for an efficient market design and a secure power system operation, being the basis for capacity allocation and congestion management processes, as acknowledged in the relevant European regulation. Alternative bidding zone configurations can be identified in a process assisted by the application of clustering methods, which use a predefined set of features, objectives and constraints to determine the partitioning of the network nodes into groups. These groups are then analysed and validated to become candidate bidding zones. The content of the manuscript can be summarized as follows: (1) A novel probabilistic multi-scenario methodology was adopted. The approach needs the analysis of features that are computed considering a set of scenarios defined from solutions in normal operation and in planned maintenance cases. The weights of the scenarios are indicated by TSOs on the basis of the expected frequency of occurrence; (2) The relevant features considered are the Locational Marginal Prices (LMPs) and the Power Transfer Distribution Factors (PTDFs); (3) An innovative computation procedure based on clustering algorithms was developed to group nodes of the transmission electrical network into bidding zones considering topological constraints. Several settings and clustering algorithms were tested in order to evaluate the robustness of the identified solutions.

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Over the last years, power systems around the globe experienced deep changes in their operation, mainly induced by the widespread of Intermittent Renewable Energy Sources (IRES). These changes involved a review of market and operational rules, in the direction of a stronger integration. At European level, this integration is in progress, driven by the new European guidelines and network codes, which deal with multiple issues, from market design to operational security. In this framework, the project TERRE (Trans European Replacement Reserve Exchange) is aimed at the realization of a European central platform, called LIBRA, for the exchange of balancing resources and, in particular, for the activation of the procured Replacement Reserve (RR) resources. The Italian Transmission System Operator (TSO), TERNA, is a participant of the project and it is testing new methodologies for the sizing of RR and its required activation throughout the TERRE process. The aim of the new methodologies is to find areas of potential improvement in the sizing of RR requirements and activation, which open up the possibility for a reduction of the procurement cost, without endangering the security of the power system. This paper describes a new RR sizing methodology, proposed by TERNA, which is based on a persistence method, showing its results on real data and highlighting key advantages and potential limitations of this approach. In order to overcome these limitations, a literature review on alternative approaches has been carried out, identifying nowcasting techniques as a relevant alternative for the very short term forecast horizon. These one could be further investigated and tested in the future, using the proposed persistence method as a benchmark.

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