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

Fairness

The conception of equal treatment, cost allocation and access embedded in the architecture.

Fairness

Within a bidding zone, participants are generally treated equally with respect to location in the wholesale settlement price.

This creates a particular conception of fairness:

same bidding zone→same locational wholesale price.\text{same bidding zone} \rightarrow \text{same locational wholesale price}.

However, participants can still impose very different network costs inside the same zone.

Zone boundaries themselves also create distributional consequences.

The architecture does not generally preserve historical service disadvantage as an explicit future priority.