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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

Network Coordination

How transmission and distribution constraints enter operational coordination.

Network Coordination

The network is represented through a zonal abstraction.

Cross-zonal capacity is calculated and supplied to market coupling.

Major constraints can therefore affect:

  • inter-zonal flows;
  • dispatch;
  • zonal prices.

Constraints inside a zone remain outside the principal wholesale settlement signal and may require redispatch.

The quality of the architecture therefore depends substantially on whether zone boundaries correspond to persistent physical congestion.