EnleashedEnleashed
Fix the energy market
Draft

Zonal Marginal Pricing

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.

Solution section

Critiques

Open questions, objections and unresolved design issues.

Critiques

Key questions include:

  1. How should bidding zones be defined?
  2. When should zones be split or merged?
  3. How much intra-zonal congestion is acceptable?
  4. Do zone boundaries become politically difficult to reform?
  5. Does zonal pricing provide sufficiently granular investment signals?
  6. How should distribution constraints be coordinated?
  7. Is redispatch simply relocating costs outside the main market price?

The architecture deliberately trades physical precision for market simplicity.