Production efficiency of nodal and zonal pricing in imperfectly competitive electricity markets

Sarfati, Mahir; Hesamzadeh, Mohammad Reza; Holmberg, Pär

doi:10.1016/j.esr.2019.02.004

Cited by 33 publications

(11 citation statements)

References 23 publications

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“…The discount factor as given in (1) takes into account increasing losses during the entire life of the transformer and cables. The annuity of the investment is another important parameter that links the annual payment "S a " for an initial investment "S o " of a commodity as given in (2). The parameter values of t, T, p, and g used in ( 1) and ( 2) are described and given in Table 2.…”

Section: Methodsmentioning

confidence: 99%

“…The optimal design of the distribution network must be dealt with care considering the extensive network layouts, system losses, and frequent characteristic interruptions [1]. Energy markets around the world are based on two pricing models; zonal and nodal, to deal with congestion due to limited transmission capacity [2,3]. However, the nodal model takes into account the actual state of the power system in a transparent manner to allocate the future distributed generation [4].…”

Section: Introductionmentioning

confidence: 99%

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Comparison of Economical and Technical Photovoltaic Hosting Capacity Limits in Distribution Networks

et al. 2021

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Power distribution networks are transitioning from passive towards active networks considering the incorporation of distributed generation. Traditional energy networks require possible system upgrades due to the exponential growth of non-conventional energy resources. Thus, the cost concerns of the electric utilities regarding financial models of renewable energy sources (RES) call for the cost and benefit analysis of the networks prone to unprecedented RES integration. This paper provides an evaluation of photovoltaic (PV) hosting capacity (HC) subject to economical constraint by a probabilistic analysis based on Monte Carlo (MC) simulations to consider the stochastic nature of loads. The losses carry significance in terms of cost parameters, and this article focuses on HC investigation in terms of losses and their associated cost. The network losses followed a U-shaped trajectory with increasing PV penetration in the distribution network. In the investigated case networks, increased PV penetration reduced network costs up to around 40%, defined as a ratio to the feeding secondary transformer rating. Above 40%, the losses started to increase again and at 76–87% level, the network costs were the same as in the base cases of no PVs. This point was defined as the economical PV HC of the network. In the case of networks, this level of PV penetration did not yet lead to violations of network technical limits.

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Section: Methodsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Comparison of Economical and Technical Photovoltaic Hosting Capacity Limits in Distribution Networks

et al. 2021

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“…The potential need for redispatch is considered in Hirth and Schlecht [19] and in Sarfati et al [20]. Both works are based on game theory to model the optimal behavior of producers.…”

Section: Literature Reviewmentioning

confidence: 99%

“…In [19], the authors do not develop a full simulation model, but they analyze a simple isolated 2-bus power system to study the difference between regulatory redispatch with cost compensation and market-based redispatch. The authors in Sarfati et al [20] make use of a full simulation model with market-based redispatch, but they assume then that the RAM of a transmission element corresponds simply to its transmission capacity, which appears to be an over-simplistic assumption. Furthermore, security constraints are not considered.…”

Section: Literature Reviewmentioning

confidence: 99%

Impact assessment of a minimum threshold on cross-zonal capacity in a flow-based market

Henneaux

Lamprinakos

d'Aertrycke

et al. 2021

Electric Power Systems Research

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The current organization of the internal electricity market in Europe relies on a zonal market system: the European power system is divided in bidding zones, electricity trades within a bidding zone can occur in an unconstrained manner, while electricity trades between bidding zones are limited by cross-zonal capacities. Two approaches can be used to calculate and allocate cross-zonal capacity: the coordinated Net Transmission Capacity (NTC) approach or the flow-based approach. In Central Western Europe, the flow-based approach is implemented for the day-ahead market since 2015. To avoid undue discrimination between internal and crossborder power exchanges, a minimum threshold of 70% on the cross-zonal capacity available for trade will be enforced in a near future. Such a threshold could significantly impact the socio-economic welfare and its distribution between the various actors. However, no assessment of the impacts of such a threshold has been performed so far, in particular because no convincing approach exists to perform such an assessment (e.g. security constraints and redispatch neglected). This paper develops such an approach and demonstrates its applicability on a case study, in order to assess the impact of a minimum threshold on cross-zonal capacity in a flow-based market.

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“…In the nodal model, however, the energy costs depend on the place to which it is delivered. Each producer is paid by customers in accordance with the local price at the node where it is located [2,3]. The market is a place where demand meets supply [4].…”

Section: Introductionmentioning

confidence: 99%

Zonal and Nodal Models of Energy Market in European Union

Borowski

2020

Energies

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Along with economic development and development of power systems, new, more effective models of the energy market are sought. Traditional zonal models used on the electricity market have proved to be poorly adapted to new circumstances and phenomena occurring in the macroeconomic environment. The main aim of the research was to show the direction (including the nodal model and prosumer behavior) in which the energy market should develop in order to meet the state-of-the-art technical, ecological and social challenges. Therefore, with the new challenges, a new chapter has opened up on very interesting research for the electrical industry. There are new solutions for the development and modernization of models from the point of view of management and econometrics of the energy market, adapted to new challenges related to ecology, technology, and competition. This article presents the zone model with its imperfections and suggestions for its improvement and proposes a nodal model that may in the near future become a new model for the functioning of the electricity market in Europe.

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Production efficiency of nodal and zonal pricing in imperfectly competitive electricity markets

Cited by 33 publications

References 23 publications

Comparison of Economical and Technical Photovoltaic Hosting Capacity Limits in Distribution Networks

Comparison of Economical and Technical Photovoltaic Hosting Capacity Limits in Distribution Networks

Impact assessment of a minimum threshold on cross-zonal capacity in a flow-based market

Zonal and Nodal Models of Energy Market in European Union

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