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    Congestion Management in Restructed Electricity Market

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    Shalini
    This document discusses various methods for managing congestion in restructured electricity markets. It describes market structures like power pools, physical and financial bilateral trading, and decentralized markets. It then covers topics such as introduction to congestion management, capacity allocation methods like nodal pricing and zonal pricing, allocation of congestion rent through financial transmission rights, uniform pricing, explicit auctioning, and flow-based market coupling. The document concludes that congestion management concepts can be grouped into explicit approaches with separate energy and transmission markets, and implicit approaches that integrate these markets.

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    Congestion Management in Restructed Electricity Market

    Uploaded by

    Shalini
    20 views23 pages
    This document discusses various methods for managing congestion in restructured electricity markets. It describes market structures like power pools, physical and financial bilateral trading, and decentralized markets. It then covers topics such as introduction to congestion management, capacity allocation methods like nodal pricing and zonal pricing, allocation of congestion rent through financial transmission rights, uniform pricing, explicit auctioning, and flow-based market coupling. The document concludes that congestion management concepts can be grouped into explicit approaches with separate energy and transmission markets, and implicit approaches that integrate these markets.

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    This document discusses various methods for managing congestion in restructured electricity markets. It describes market structures like power pools, physical and financial bilateral trading, and decentralized markets. It then covers topics such as introduction to congestion management, capacity allocation methods like nodal pricing and zonal pricing, allocation of congestion rent through financial transmission rights, uniform pricing, explicit auctioning, and flow-based market coupling. The document concludes that congestion management concepts can be grouped into explicit approaches with separate energy and transmission markets, and implicit approaches that integrate these markets.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    20 views23 pages

    Congestion Management in Restructed Electricity Market

    Uploaded by

    Shalini
    This document discusses various methods for managing congestion in restructured electricity markets. It describes market structures like power pools, physical and financial bilateral trading, and decentralized markets. It then covers topics such as introduction to congestion management, capacity allocation methods like nodal pricing and zonal pricing, allocation of congestion rent through financial transmission rights, uniform pricing, explicit auctioning, and flow-based market coupling. The document concludes that congestion management concepts can be grouped into explicit approaches with separate energy and transmission markets, and implicit approaches that integrate these markets.

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    You are on page 1of 23

    CONGESTION MANAGEMENT IN RESTRUCTED ELECTRICITY

    MARKET

    SUBMITEDED BY-
    ANURAG TYAGI
    BRANCH-ELECTRICAL
    (CORE)
    ROLL NO-1705352
    CONTENT
    Power pool and financial bilateral market
    Power pool and physical bilateral trading
    Decentralized Market Structure
    Introduction of congestion management
    Capacity Allocation Method
    Implication For Congestion Management and pricing
    Allocation of congestion management through FTRS
    Nodal pricing and generic market Structures
    Zonal Pricing
    Uniform Pricing
    Explicit Auctioning
    Flow based Market Coupling
    Capacity Alleviation Method
    Conclussion
    INTRODUCTION
    Transmission pricing and congestion management are distinct
    elements of electricity market design. In contrast to solutions
    configured to match the unique structural and historical features
    of specific national markets this chapter aims at providing a
    conceptual overview on congestion management methods
    POWER POOL and Financial Bilateral Trading
    The market structure where physical energy trade is
    allowed only through a mandatory power pool:
    No direct transactions between sellers and customers
    are possible.
    In a mandatory pool model no physical, bilateral
    transaction are allowed beside the pool.
    Power Pool and Physical Bilateral Trading
    The market structure where generators and loads may
    either settle into bilateral contracts or trade energy
    through the pool
    This structure is suggested by the US Federal Energy
    Regulatory Commission (FERC) as standard market
    design (SMD). It is implemented in the Pennsylvania-
    New Jersey-Maryland (PJM) Interconnection, in New
    York and New England and scheduled for introduction
    in California.
    Decentralized Market Structures
    The structures in sections and premised the
    existence of a pool operator whose main objectives are
    to make the pool market work and to ensure the
    reliability of the transmission network by scheduling
    network services
    the ISO may still run hour-ahead and real-time spot
    markets to keep the system in balance and relieve
    congestion, day-ahead spot markets may be run by
    different entities.
    Introduction to Congestion Management
    Capacity allocation methods aim at allocating transmission capacity mostly
    before the physical delivery of the energy takes place. Capacity alleviations
    methods are also referred to as remedial actions. When using these
    methods, market parties are not directly notified of the existence of
    congestion
    Some following requirements are:
    not discriminate: Each market participant - be it a consumer or a producer -
    should be treated equally
     be transparent: The implementation should be well defined and
    transparent for all participants.
    be feasible: The available resources (information, computer systems) need
    to be capable
    be feasible: The available resources (information, computer systems) need
    to be capable
    Capacity Allocation Methods
    The general idea of nodal pricing is to 1) model an
    electricity market with its various economical and
    technical specifications, such as generators’ cost functions,
    demand elasticity, generation limits (individual and
    overall), power flow limits etc. and 2) optimize the system
    which is synonymous to maximizing social welfare
    Implications for Congestion Management
    and Pricing
    With no transmission constraints and losses neglected
    there will be one “system lambda” resp.
    NR = Sum Pi not equal Pij (ρi − ρj ) | Pij|
    ρi price at node i
    ρj price at node j
    Pij power flow from node i to j
    Allocation of Congestion Rent through FTRs
    The use of financial transmission rights (FTRs) was
    proposed by William Hogan of Harvard University.
    FTRs may be seen as an evolution of contracts for
    differences
    The use of financial transmission rights (FTRs) was
    proposed by William Hogan of Harvard University.
    FTRs may be seen as an evolution of contracts for
    differences
    Nodal Pricing and Generic Market
    Structures
    Nodal prices are the ‘outcome’ of an optimization
    process, where the objective is to maximize social
    welfare according to generation and network
    constraints
    Generators and loads bid their willingness to produce
    (consume) in an auction supervised by the ISO. The
    procedure follows the previously outlined spot market
    rules
    The ISO then performs a security constrained unit
    commitment (SCUC) and dispatch
    Zonal Pricing
    Zonal pricing - in accordance with nodal pricing -
    establishes different electricity prices for different
    locations in the network.
    An example is the Norwegian system, where the
    system operator splits the national transmission
    system into two zones (North and South) in the case of
    congestion
    Zonal Pricing and Generic Market Structures
    The Scandinavian countries give a working example of
    zonal pricing, emphasizing that no central dispatch
    and unit commitment is necessary as with nodal
    pricing.
    Uniform Pricing
     Zonal pricing certain areas in a network are
    aggregated to predefined price-zones
    In these zones, prices are not distinguished node by
    node, but are unified
    Explicit Auctioning
    explicit auctioning is a market-based concept, which
    provides economic signals
    This applies to the tie lines between e.g. Germany and
    the Netherlands, Germany and Denmark, France and
    the United Kingdom, the United Kingdom and Ireland
    Auctions for capacity may be designed as uniform or
    discriminatory auctions, where “the price of the
    interconnector is set equal to the lowest accepted bid
    Flow-based Market Coupling (FMC)
    The proposal of flow-based market coupling (FMC) by
    the Association of European Power Exchanges
    (EuroPex) evolved from this market splitting concept.
    FMC’s objective is to coordinate market operation at
    the day-ahead stage.
    FMC is designed to be able to coexist with forward
    energy markets and explicit transmission capacity
    markets.
    Capacity Alleviation Methods
    capacity alleviation methods and allocation methods were
    distinguished
    Redispatching-redispatching may be used in conjunction with
    uniform marginal pricing.
    Redispatching may also be used among different TSOs, which
    makes close coordination necessary
    Countertrade or Buy-Back Procedure-“Countertrading is based
    upon the same principles as redispatching”[41], but may be
    considered market-oriented
    Countertrading is used for real-time congestion relief in the
    Norwegian system and is used as exclusive CM concept in the
    Swedish market
    Conclusion
    CM concepts may be also grouped into explicit and
    implicit approaches. Explicit approaches establish two
    markets, one for energy and one for transmission.
    Hence, market participants have to take transactions
    in both markets. Implicit auctions integrate the
    markets for energy and transmission. Thus, capacity is
    allocated implicitly by energy bids at a specific
    location within the network.

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