European Electricity Market Integration With Mixed Market Designs—Part II: Solution Algorithm and Case Studies

Abstract

This paper presents the solution algorithm and test results of the market-splitting approach, proposed in the first part of this two-paper series, for the clearing of the forthcoming Internal Electricity Market. The market-splitting approach is implemented in a Europe-wide level, indicatively defining three power pools and 22 power exchanges, comprising 42 bidding areas in total, with each local/national market respecting the standard market regulatory framework of power pools and power exchanges (PXs). The performance and computational requirements of this implementation is presented; the model is tested in terms of problem solvability to its limits, considering a day-ahead market clearing time threshold equal to one hour. The results demonstrate that a viable solution to the clearing of the Internal Electricity Market can be attained with the current state-of-the-art of computers' processing power. Further discussion is made concerning the viability of the proposed approach and other harmonization issues that should be considered for successful market integration.