A wholesale architecture in which electricity is priced within geographic bidding zones, inter-zonal congestion affects market prices and residual internal congestion is managed through redispatch.
At a glance
A wholesale architecture in which electricity is priced within geographic bidding zones, inter-zonal congestion affects market prices and residual internal congestion is managed through redispatch.
State of the debate
Architecture at a glance
Location enters at zone level: each zone clears its own price, with cross-zonal capacity and residual congestion handled between zones.
Price formation happens per zone
Zone A
Zonal price A
Zone B
Zonal price B
Zone C
Zonal price C
Cross-zonal capacity & congestion
Zonal separation + residual redispatch
Balancing mechanism
Separate mechanism, as in the national design
Consumers & retailers (within their zone)
A high-level introduction to the market architecture.
Zonal pricing divides the electricity system into geographic bidding zones.
Participants within a zone normally face a common wholesale price. Limited transmission capacity between zones is represented in market clearing and can cause neighbouring zonal prices to diverge.
Constraints remaining within a zone are generally handled through redispatch or other system-operator actions.
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