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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

How network constraints, access and network value are represented.

Network

The transmission network enters the wholesale architecture through:

  • bidding-zone definitions;
  • cross-zonal transfer capability;
  • redispatch.

Distribution networks remain largely separate.

A central design problem is therefore deciding how much physical network detail should be absorbed into the zone definition and how much should remain operationally managed outside the wholesale price.