Analysis of the European day-ahead electricity market coupling mechanism: Discussion, modeling, and simulation

This paper studies the inclusion of grid constraints into the internal European market clearing algorithms, using an optimization-based approach to provide a comprehensive and comparative analysis of different approaches, namely, Available Transfer Capacity (ATC), Flow-Based (FB), and hybrid ATC+FB. Specific EUPHEMIA-like algorithms are developed and the analysis considers both the social welfare maximization and power exchanges feasibility, the latter validated with an AC power flow. The case study includes real network data from Portugal, Spain, France, Belgium and Germany-Luxemburg bidding zones. Market data made available by MIBEL was used to model two compound Poisson processes representing electricity spot market bidding process and to generate five bidding scenarios, with the number of steps adjusted proportionally to the demand and generation in each bidding zone. The network model was built from the data available in the "Input grid datasets for the preparation of the Ten-Year-Network-Development-Plan (TYNDP) 2018", made available by ENTSO-E. The results show that the FB approach presents a higher social welfare value and feasibility when compared to the ATC approach. When considering the ACT values provided by ENTSO-E transparency platform for Iberian Peninsula, as it is done in the Single Day-Ahead Coupling (SDAC), the hybrid ATC+FB approach compares well with the FB approach in terms of both social welfare and AC power flow feasibility.