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Market coupling and the importance of price coordination between power exchanges
Meeus, Leonardo Vandezande, Leen Cole, S. Belmans, Ronnie
Meeus, Leonardo
Vandezande, Leen
Cole, S.
Belmans, Ronnie
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Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2009
Journal
Energy
Book
Publication Volume
34
Publication Issue
3
Publication Begin page
228
Publication End page
234
Publication Number of pages
Collections
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.
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Keywords
Energy Markets, Pricing, Electric Market Equilibrium, Operational Research, Power System Economics, Duality