Congestion Management in Electricity Networks: Nodal, Zonal and Discriminatory Pricing

Pär Holmberg () and Ewa Lazarczyk ()

No 915, Working Paper Series from Research Institute of Industrial Economics

Abstract: Wholesale electricity markets use different market designs to handle congestion in the transmission network. We compare nodal, zonal and discriminatory pricing in general networks with transmission constraints and loop flows. We conclude that in large games with many producers who are allowed to participate in the real-time market the three market designs result in the same efficient dispatch. However, zonal pricing with counter-trading results in additional payments to producers in export-constrained nodes.

Keywords: Congestion management; Wholesale electricity market; Transmission network; Nodal pricing; Zonal pricing with countertrading; Discriminatory pricing; Large game (search for similar items in EconPapers)
JEL-codes: C72 D44 D61 L13 L94 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-net
Date: 2012-04-20
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Working Paper: Congestion management in electricity networks: Nodal, zonal and discriminatory pricing (2012)
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