A Framework for Assessing Electricity Market Performance under Different Bidding Zone Configurations

Haoke Wu, Tao Huang (), Stefania Conti and Ettore Bompard
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Haoke Wu: Department of Energy, Politecnico di Torino, 10129 Turin, Italy
Tao Huang: Department of Energy, Politecnico di Torino, 10129 Turin, Italy
Stefania Conti: Department of Electrical, Electronic and Computer Engineering, Università di Catania, 95123 Catania, Italy
Ettore Bompard: Department of Energy, Politecnico di Torino, 10129 Turin, Italy

Energies, 2024, vol. 17, issue 11, 1-16

Abstract: Improper configuration of bidding zones can lead to market efficiency losses, hinder the integration of renewable energy sources (RESs), and reduce grid security. To evaluate the impact of different bidding zone configurations on market performance, we developed a multi-dimensional evaluation framework containing a series of indicators covering aspects of market efficiency, grid security, and sustainability. These indicators facilitate the comparisons among different market dispatch mechanisms. To validate the proposed framework, the reconfiguration of the Italian bidding zones has been applied to a simplified Italian grid model to compare the market performance under different bidding zone configurations. The simulation results indicate that the implemented reconfiguration has led to enhanced market efficiency and security in the Italian power system. However, the reconfiguration shows a comparatively lower reduction in greenhouse gas (GHG) emissions, suggesting a weaker sustainable performance.

Keywords: market zonal configuration; market performance assessment; market-clearing mechanisms (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2024
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