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

Roadmap & Implementation

Institutions, infrastructure, transition requirements and practical implementation.

Roadmap & Implementation

Implementation requires:

definition of bidding zones;
cross-zonal capacity calculation;
market-coupling infrastructure;
settlement changes;
balancing arrangements;
redispatch rules;
hedging arrangements.

For Great Britain, moving to zonal pricing would require a political and technical decision about where boundaries should sit and how existing contracts, generation and consumers should transition.