Congestion management market design- Approach for the Nordics and Central Europe

Abstract

It is undeniable that congestion is an increasing problem of power systems nowadays. Ways to tackle it embrace non-market and market-based solutions. Network reinforcement, network reconfiguration, reactive power control, etc., are some instances of non-market-based solutions. In contrast, solutions based on market mechanisms such as zonal pricing, nodal pricing, redispatch, and markets for flexibility (e.g., congestion management market (CMM)) are considered market-based alternatives. Among the said alternatives, CMM is the newest concept, leading to many unknown issues associated with it that initiated us to present the article. The article discusses the congestion problem and criteria to evaluate congestion management (CM) alternatives. In addition, to have a practical grasp of CM, its cost, and how congestion is traditionally handled, a real-life problem solving of a distribution system operator (DSO) is presented. Concerning CMMs, four conditions that need to be met before considering CMM as a CM solution are specified. In addition, three CM services, including long-term, short-term, and operational, followed by different implementations of those services, are proposed and compared. In general, CMM design is a complex problem because several stakeholders with different tasks, visions, business models, and capabilities must work together; therefore, looking at the situation from various angles is beneficial. This article thrives on providing a vivid view on the features of different CMM models to stakeholders such as DSOs, transmission system operators (TSOs), flexibility service providers (FSPs), regulators, existing markets, retailers, balance responsible parties (BRPs), etc., that may have interest in CMMs.