Market coupling and the importance of price coordination between power exchanges

Leonardo Meeus, L. Vandezande, S. Cole and R. Belmans

Energy, 2009, vol. 34, issue 3, 228-234

Abstract: In Europe, market coupling stands for a further integration of wholesale trading arrangements across country borders. More specifically, it refers to the implicit auctioning of cross-border physical transmission rights via the hourly auctions for electric energy organized by power exchanges (PEXs) one day ahead of delivery. It therefore implies that the PEXs can optimize the clearing of their day-ahead auctions. Due to verticals in the aggregated order curves, the optimal solution can be settled at different prices. In order for prices to give correct locational signals for network development, generation and consumption, price coordination between exchanges is necessary. The paper illustrates this issue, its relevance and discusses how to deal with it.

Keywords: Pricing; Electric market equilibrium; Operational research; Power system economics; Duality (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:34:y:2009:i:3:p:228-234

DOI: 10.1016/j.energy.2008.04.013

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