Determination of alternative bidding areas based on a full nodal pricing approach

Breuer, Christopher K.; Seeger, Nick; Moser, Albert

doi:10.1109/pesmg.2013.6672466

Cited by 30 publications

(20 citation statements)

References 7 publications

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“…With the right choice of NTCs to represent scarcity signals for transmission a better ex-ante market dispatch is reached and less requirements for re-dispatch occur. Breuer et al (2013) and Breuer and Moser (2014) use a similar methodology for the delimitation of bidding zones. Clustering nodes with similar prices to a different number of zones they find that about 14 zones for Europe would be optimal regarding the trade-off between network security and market efficiency, on the one hand, and the stability of bidding zone delimitation, on the other hand.…”

Section: Literature Overviewmentioning

confidence: 99%

Two Price Zones for the German Electricity Market: Market Implications and Distributional Effects

Egerer

Weibezahn

Hermann³

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractWe discuss the implications of two price zones, i.e. one northern and southern bidding area, on the German electricity market. In the northern zone, continuous capacity additions with low variable costs cause large regional supply surpluses in the market dispatch while conventional capacity decreases in the southern zone.As the spatial imbalance of supply and load is increasing, the current single bidding area results more often in technically infeasible market results requiring curative congestion management.There is an ongoing discussion about the potential effects of introducing bidding zones in Germany. Using a line sharp electricity sector model, this paper analyzes the system implications and the distributional effects of two bidding zones in the German electricity system in 2012 and 2015, respectively. Results show a modest decrease in cross-zonal re-dispatch levels, in particular in 2015. However, overall network congestion and re-dispatch levels increase in 2015 and also remain high for both bidding zones. Results are very sensitive to additional line investments illustrating the challenge to define stable price zones in a dynamic setting. With two bidding areas, prices in the model results increase in the southern zone and decrease in the northern zone. The average price deviation grows from 0.4 EUR/MWh in 2012 to 1.7 EUR/MWh in 2015 with absolute values being significantly higher in hours with price differences. Stakeholders within zones are exposed to the price deviations to a different extent. Distributional effects are surprisingly small compared to the wholesale price or different network charges.

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Section: Literature Overviewmentioning

confidence: 99%

Two Price Zones for the German Electricity Market: Market Implications and Distributional Effects

Egerer

Weibezahn

Hermann³

2015

SSRN Journal

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“…Inaccuracy of the day-ahead prediction of those injections/withdrawals (p pre ≠ p act , where p pre denotes predicted injections, and p act 2 By "consumers of energy" we do not mean the single households/enterprises, but the distribution companies buying the energy on wholesome market to satisfy the demand in their area. 3 In all following matrix equations vectors have to be interpreted as columns. Thus, the accuracy of prediction of power flows is crucial both for the safety of the transmission network, as well as for the economic efficiency of zonal market.…”

Section: A Objective Functionmentioning

confidence: 99%

The scheme of a novel methodology for zonal division based on power transfer distribution factors

Klos

Wawrzyniak

Jakubek

et al. 2014

IECON 2014 - 40th Annual Conference of the IEEE Industrial Electronics Society

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Abstract-One of the methodologies that carry out the division of the electrical grid into zones is based on the aggregation of nodes characterized by similar Power Transfer Distribution Factors (PTDFs). Here, we point out that satisfactory clustering algorithm should take into account two aspects. First, nodes of similar impact on cross-border lines should be grouped together. Second, cross-border power flows should be relatively insensitive to differences between real and assumed Generation Shift Key matrices. We introduce a theoretical basis of a novel clustering algorithm (BubbleClust) that fulfills these requirements and we perform a case study to illustrate social welfare consequences of the division.

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“…also Breuer et al 2013). The modelling of redispatch volumes and costs involves necessary but appropriate simplifications.…”

Section: Literature Reviewmentioning

confidence: 99%

“…BjØrndal and Jörnsten 2001) , could be a preferable interim solution to deal with the increasing congestion in Germany (cf. Breuer et al 2013). No ISO is needed and a faster implementation of the mechanism is to be expected.…”

Section: Introductionmentioning

confidence: 99%

An Integrated Approach to Model Redispatch and to Assess Potential Benefits from Market Splitting in Germany

Trepper

Bucksteeg

2013

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in AbstractIn the light of the sharp increase in redispatch measures seen within the last years, the importance of an efficient management of network congestion increases particularly in Germany. Against this background, we develop an integrated approach to model (re)dispatch for Germany in detail while considering interactions with neighbouring countries. We identify increased RES-production, resulting imports and exports, delays in grid extension and the nuclear phase-out as main drivers for the nearly doubling of redispatch volumes in 2015. We show that market splitting can potentially contribute to a secure grid operation and leads to a significant reduction of redispatch volumes. We state that market splitting can of course not be the 'one and only solution' but an interim approach to manage upcoming congestion in Germany in times of incomplete grid expansion and that this approach can also serve as an alternative to grid extension within less congested areas.

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Determination of alternative bidding areas based on a full nodal pricing approach

Cited by 30 publications

References 7 publications

Two Price Zones for the German Electricity Market: Market Implications and Distributional Effects

Two Price Zones for the German Electricity Market: Market Implications and Distributional Effects

The scheme of a novel methodology for zonal division based on power transfer distribution factors

An Integrated Approach to Model Redispatch and to Assess Potential Benefits from Market Splitting in Germany

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