In recent years, the operation of the European electricity system has undergone significant transformation due to an increased level of interconnection between countries, a progressive integration of electricity markets, and a noteworthy shift in the generation mix towards decentralized renewable energy sources. All these changes required substantial modifications and upgrades to operational processes and methodologies, including the way in which transmission constraints are implemented into market clearing algorithms. Specifically, while in the United States the multi-settlement locational marginal pricing (LMP) market design has been progressively adopted in all the liberalized markets, a zonal market design is adopted in Europe. The effectiveness of a zonal market in accurately reflecting power system constraints is closely tied to the quality of the implemented Bidding Zone configuration and to the ability of the capacity calculation methodology to capture the actual functioning of the power system. Italy is one of the few European countries (together with Sweden, Norway and Denmark) internally divided into multiple Bidding Zones. Currently, a Coordinated Net Transmission Capacity approach (CNTC) is employed at these internal borders. Whereas this methodology performs well when the bidding zones are radially connected or connected solely by DC links (as in the current Italian Bidding Zone configuration), it may not be optimal for more complex topologies. For this reason, in view of potential future changes in the Bidding Zone configuration, this paper focuses on a new methodology for capacity calculation on internal Italian bidding zone borders. The explored approach is grounded in a Flow-Based (FB) methodology, as outlined in the European Capacity Allocation and Congestion Management Guidelines (CACM) as the standard reference. Under this approach, the Zonal Power Transfer Distribution Factors (PTDFz) are computed for a set of Critical Branch and Critical Outages (CBCOs) and are integrated into the market coupling. This allows the algorithm to estimate expected changes in power flows on CBCOs as results of changes in Bidding Zone Net Positions even in highly meshed networks, minimizing overall system costs. The FB capacity calculation methodologies already implemented in the CORE and in the Nordic area provided a relevant basis for this work. Technical solutions for the main steps and parameters evaluation are discussed, namely: a) Selection of Critical Network Element with Contingency in the Italian 380-220 kV grid; b) Computation of key parameters, such as zonal PTDFs, Remaining Available Margins (RAMs), Net Positions, Generation Shift Keys (GSKs); c) Integration of HVDC Interconnectors; d) Methodology to consider Remedial Actions; e) Tasks and additional constraints (voltage and stability constraints) to apply this approach in the Italian system. In the second part of the paper, a use-case on a test grid is presented. The case study elaborates on the potential future effects on market efficiency and power system security for the future. The use case enables an analysis of the distinctions between the FB approach and the conventional CNTC approach. It emphasizes scenarios where the latter proves adequate and instances where the former can yield substantial advantages in terms of market efficiency and power system security.

Study on the effects of the flow-based approach in the Italian bidding zones capacity calculation

Stefano QUAIA
Penultimo
;
2024-01-01

Abstract

In recent years, the operation of the European electricity system has undergone significant transformation due to an increased level of interconnection between countries, a progressive integration of electricity markets, and a noteworthy shift in the generation mix towards decentralized renewable energy sources. All these changes required substantial modifications and upgrades to operational processes and methodologies, including the way in which transmission constraints are implemented into market clearing algorithms. Specifically, while in the United States the multi-settlement locational marginal pricing (LMP) market design has been progressively adopted in all the liberalized markets, a zonal market design is adopted in Europe. The effectiveness of a zonal market in accurately reflecting power system constraints is closely tied to the quality of the implemented Bidding Zone configuration and to the ability of the capacity calculation methodology to capture the actual functioning of the power system. Italy is one of the few European countries (together with Sweden, Norway and Denmark) internally divided into multiple Bidding Zones. Currently, a Coordinated Net Transmission Capacity approach (CNTC) is employed at these internal borders. Whereas this methodology performs well when the bidding zones are radially connected or connected solely by DC links (as in the current Italian Bidding Zone configuration), it may not be optimal for more complex topologies. For this reason, in view of potential future changes in the Bidding Zone configuration, this paper focuses on a new methodology for capacity calculation on internal Italian bidding zone borders. The explored approach is grounded in a Flow-Based (FB) methodology, as outlined in the European Capacity Allocation and Congestion Management Guidelines (CACM) as the standard reference. Under this approach, the Zonal Power Transfer Distribution Factors (PTDFz) are computed for a set of Critical Branch and Critical Outages (CBCOs) and are integrated into the market coupling. This allows the algorithm to estimate expected changes in power flows on CBCOs as results of changes in Bidding Zone Net Positions even in highly meshed networks, minimizing overall system costs. The FB capacity calculation methodologies already implemented in the CORE and in the Nordic area provided a relevant basis for this work. Technical solutions for the main steps and parameters evaluation are discussed, namely: a) Selection of Critical Network Element with Contingency in the Italian 380-220 kV grid; b) Computation of key parameters, such as zonal PTDFs, Remaining Available Margins (RAMs), Net Positions, Generation Shift Keys (GSKs); c) Integration of HVDC Interconnectors; d) Methodology to consider Remedial Actions; e) Tasks and additional constraints (voltage and stability constraints) to apply this approach in the Italian system. In the second part of the paper, a use-case on a test grid is presented. The case study elaborates on the potential future effects on market efficiency and power system security for the future. The use case enables an analysis of the distinctions between the FB approach and the conventional CNTC approach. It emphasizes scenarios where the latter proves adequate and instances where the former can yield substantial advantages in terms of market efficiency and power system security.
File in questo prodotto:
File Dimensione Formato  
10389_C5_PS2_Full Paper.pdf

Accesso chiuso

Descrizione: Full paper versione finale
Tipologia: Documento in Versione Editoriale
Licenza: Copyright Editore
Dimensione 1.33 MB
Formato Adobe PDF
1.33 MB Adobe PDF   Visualizza/Apri   Richiedi una copia
Pubblicazioni consigliate

I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.

Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11368/3097500
Citazioni
  • ???jsp.display-item.citation.pmc??? ND
  • Scopus ND
  • ???jsp.display-item.citation.isi??? ND
social impact