Dynamic zonal pricing swegrids-logo

SweGRIDS research area SMARTPOWER
SweGRIDS project code SP1
Project type PhD
Status completed
Researcher Mahir Sarfati   (webpage)
University KTH (EPE)
Project period 2012-09-01 to 2017-12   
Project supervisor Mohammad Reza Hesamzadeh   (webpage)
Industrial sponsors Svenska kraftnät


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Project abstract

In the liberalized electricity markets, there are two approaches to deal with the limited capacity of the transmission network. These approaches are zonal pricing, and nodal pricing. The following issues will be studied in the context of the Swedish electricity supply industry and under the two mentioned pricing approaches: (1) Mis-pricing and disorderly bidding of generators, (2) Inconsistency between pricing and dispatch outcomes (the issue of constrained-on and constrained-off generators), (3) Short term dispatch efficiency, (4) Security of Supply (SoS), (5) Counter-price flows, (6) Merchandising surplus, (7) Investment in the generation sector, (8) Pressure to build-out transmission constraints, (9) Pressure to change region boundaries, (10) Possible solutions to the problems arising from zonal pricing. The above ten issues will be studied using analytical methods.


Summary of work

A game theoretic model to formulate the strategic behavior of a generation portfolio under different pricing regimes is developed. The strategic bidding decisions of generators are formulated in two different models (a) continuous model and (b) discrete model. First the continuous model is studied. This model is applied to the small example systems and the results are validated; then the model is applied to larger case study.

2016. The strategic behavior of generation firms in two-settlement market environment is formulated using the concept of two-stage Nash equilibrium. Different mathematical techniques are applied and the solution of the developed model is improved. The developed model is applied to the small example systems and the results are validated. Then the model is applied to larger case study and the results are reported in a working paper. The developed model is extended to model the competition between generation firms in the zonal markets. The model is applied to the small example systems and the results are validated.

2017. The oligopolistic competition between multiple producers is studied using the developed mathematical model. We consider three real-time market designs: (1) Nordic design, (2) British design and (3) nodal design. Strategic bidding of producers under these market designs is studied. We propose a new real-time market design which mitigates the inefficiencies arising from the Nordic and British market designs and it improves the social welfare. The developed model of each market design and the numerical results are reported in 3 working papers.


Event log

2017. Presented the Work in IFORS 2017 Conference


Project reference-group

Pär Holmberg,  IFN
Fredrik Carlsson,  Vattenfall
Jonas Persson,  Vattenfall
Kristian Gustafsson,  Vattenfall
Anna Guldbrand,  Svenska kraftnät
Mats Nilsson,  Shadow Analysis AB (and prev. Vattenfall)
Darryl Biggar,  ACCC
Christian Rojas,  KTH
Steven Gabriel,  University of Maryland


Publications by this researcher

See alternatively the researcher's full DiVA list of publications, with options for sorting.
Publications in journals and conferences usually will not show until a while after they are published.

Simulation and Evaluation of Zonal Electricity Market Designs
Mahir Sarfati,   Pär Holmberg.
2020,   Electric power systems research, vol. 185

Production efficiency of nodal and zonal pricing in imperfectly competitive electricity markets
Mahir Sarfati,   Mohammad Reza Hesamzadeh,   Pär Holmberg.
2019,   Energy Strategy Reviews, vol. 24

Probabilistic pricing of ramp service in power systems with wind and solar generation
Mahir Sarfati,   Mohammad Reza Hesamzadeh,   D. R. Biggar,   R. Baldick.
2018,   Renewable & sustainable energy reviews, vol. 90

Five Indicators for Assessing Bidding Area Configurations in Zonally-Priced Power Markets
Mahir Sarfati,   Mohammad Reza Hesamzadeh,   Alexandre Canon.
2015,   General Meeting of the IEEE-Power-and-Energy-Society, JUL 26-30, 2015, Denver, CO

A Probabilistic Spot Market Design for Reducing Real-Time Balancing Costs
Mahir Sarfati,   Mohammad Hesamzadeh,   Pedro Benedicto Martinez.
2014,   2014 IEEE Power and Energy Society General Meeting, National Harbor, United States, 27 July 2014 through 31 July 2014

Pricing schemes for dealing with limited transmission capacity - A comparative study
Mahir Sarfati,   Mohammad R. Hesamzadeh.
2013,   2013 IEEE Power and Energy Society General Meeting, PES 2013

Transmission planning with probabilistic modeling of multiple contingencies
Mahir Sarfati,   Olga Galland,   Mohammad R. Hesamzadeh.
2013,   10th International Conference on the European Energy Market, EEM 2013

The diversification benefit of additional transmission capacity
Mahir Sarfati,   Mohammad R. Hesamzadeh.
2013,   2013 IEEE Grenoble Conference PowerTech, POWERTECH 2013

Publication list last updated from DiVA on 2021-09-18 22:02.


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Page started: 2012-09-01
Last generated: 2021-09-18