Redispatch in zonal pricing electricity markets

Arbeitspapier

Zonal pricing electricity markets operate sequentially. First, the suppliers compete in a spot market. Second, to alleviate the congestion in the transmission line, in a redispatch market, the suppliers in the importing node are called into operation to increase their production, and the suppliers in the exporting node are compensated to reduce their production. I characterize the equilibrium in a zonal market when the competition is imperfect and the spot and redispatch markets operate sequentially. I also work out the equilibrium when the transmission line is taken into account in the spot market, i.e., it is not necessary to introduce a redispatch market to alleviate the congestion in the transmission line. I find that the consumers' welfare and suppliers' profits depend crucially on the type of redispatch design implemented by the auctioneer, and that could introduce long term investment distortions.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IFN Working Paper ; No. 1278

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Auctions ; Oligopoly and Other Imperfect Markets ; Electric Utilities
• Subject: Electricity auctions ; Redispatch design ; Transmission constraint ; Zonal pricing electricity markets

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Blazquez de Paz, Mario
• Event: Veröffentlichung
• (who): Research Institute of Industrial Economics (IFN)
• (where): Stockholm
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/210919
• Last update: 10.03.2025, 11:45 AM CET