Congestion Managment and Block Bids in Deregulated Electricity Markets

The project focuses on studying alternative ways of handling congestion management and block bids in deregulated electricity markets. Both the Nordic and the European electricity market will be studied. Comparisons between nodal pricing, zonal pricing and counter purchase for the European market, as a whole in a fully integrated market design, will be performed on a simplified model of the European Electricity network. Studies will also be conducted on a simplified model for the Nordic market using the sa me aggregation level as is used in Nord Pool. One approach involves the assumption of a super transmission system operator with complete authority over the operation of the electricity network. An alternative is a more loosely coupled solution in which th e congestion management across regions is designed, whereas the national system operators use different congestion management schemes within their region. The project aims to investigate the efficiency of the various alternatives. With respect to the inte raction with the spot market, markets in which block bidding is allowed, is compared with the alternative without block bids. Here we investigate the effects of block bids in zonal versus nodal pricing systems. We also try to find out how an increased per centage of block bids and the sizes of block bids affect the current pricing practice with hourly energy prices and the need to develop a more refined pricing mechanism.