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We propose a hierarchical scheme for the coordination of transmission and distribution system operations, which is inspired by nested decomposition and tailored for integration in upcoming European balancing markets. We compare our proposal to a number of recent European research projects and pilots. We demonstrate the effectiveness of our proposal in resolving a number of transmission-distribution coordination dilemmas, including conflict resolution between network operators, self-healing, sharing charges in mutually beneficial actions, and the recursive integration of distributed resources in pan-European balancing markets. We implement a proof-of-concept market clearing platform that can match transmission and distribution system market orders, cope with non-convexities in market offers and power flow constraints, scale to systems of realistic size, and respect the decentralization of communications and information sharing which is required in European electricity markets. We demonstrate the effectiveness of our platform on large-scale instances of the Italian and Danish power systems based on data sourced from the EU Horizon 2020 SmartNet project. We demonstrate the superiority of our approach to alternative coordination schemes in terms of economic efficiency, alignment of incentives and system security.

The inherent coupling of the electric and natural gas systems due to the operation of gas generating units and power-to-gas facilities, along with the uncertainties faced in both systems due to the variability in electricity and gas demand and the vastly increasing volatile renewable injections, create an imperative need to schedule and operate the two systems in a coordinated manner. In this paper a new model for the fully integrated stochastic day-ahead scheduling of electric and gas systems is presented, coping with the uncertainties of both systems. The stochastic parameters comprise the electricity demand and the renewable injections, which collectively create several net electricity load scenarios, and the gas residential/industrial demand. The integrated scheduling problem concerns a unit commitment for the electricity problem, amended with additional constraints imposed by the underlying natural gas transmission system considering steady-state flow. A two-stage stochastic programming model is devised, having as second stage the possible realizations of net electricity load and gas demand in real-time. The model is tested in medium-size real-world test systems - the Greek electricity and gas systems - deriving useful insights on the advantages of the integrated stochastic scheduling versus the deterministic scheduling of the electricity and gas systems.

In this paper, three novel approaches are presented for the clearing of the European day-ahead electricity market, incorporating the majority of the currently tradable products, namely the simple hourly orders, the block orders, the complex orders, and the “Prezzo Unico Nazionale” (PUN) orders. The first approach employs a Master Problem and a Sub-Problem sequentially solved within an iterative process, whereas two single-model approaches are also formulated for the efficient handling of the market orders’ clearing conditions and the handling of non-intuitive bilateral exchanges. In the single-model approaches, the clearing conditions of the block, complex, and PUN orders are explicitly incorporated in the Sub-Problem, by utilizing a Mixed Complementarity Problem formulation. The three approaches are compared in terms of solution efficiency (social welfare) and computational requirements. A sensitivity analysis is performed for all three approaches, in order to evaluate the efficiency of the attained solution with respect to the method used for the designation and subsequent elimination of all attained Paradoxically Accepted Orders.

The stated aim of the European Commission has been the unbounded flow of energy across Europe and the effective functioning of a single European power market so as to achieve secure, sustainable and affordable energy supplies, as well as to foster competition and increase the utilization of electricity networks and generation capacity. Most countries have already adapted or are gradually adapting their wholesale markets to the provisions of the so called Target Model for the internal electricity market in Europe, however Greece still lies behind in this binding target. In this paper, the basic design variables and respective options for the integration of the Greek wholesale electricity market with the other European markets under the Target Model paradigm are presented. The design variables refer to all market instances and mechanisms. The proposed choices are justified in terms of effectiveness and market power mitigation, considering the current market structure in Greece. A transitional phase for the full integration of the Greek Intraday and Balancing Markets is proposed, considering the relevant evolutions in the wholesale markets of Greece’s neighboring countries. Finally, a simulation analysis is performed in order to highlight the implications on schedules of utilizing European-based order formats in the restructured Greek electricity market.

Following the latest directives, the European Union promoted the integration of local/national electricity markets into one multi-area market, thus allowing the optimal exploitation of the scarce interconnection transmission capacity. In this paper, the authors present a mathematical formulation that explicitly incorporates nearly all market products and transmission constraints currently appearing in the European Power Exchanges (PXs). The proposed clearing model incorporates an optimization problem, formulated as a mixed integer linear programming model, and is solved within an iterative algorithm for the handling of paradoxically accepted block and minimum income orders.

This paper presents a deterministic unified unit commitment and economic dispatch model that integrates storage devices in the short-term power system scheduling under high renewable energy penetration. The presented model is a single multi-hour look-ahead real time tool that uses multiple time resolution to reduce its computational requirements. Operating on a rolling basis, the decisions of the first scheduling period are binding while the decisions of the remaining scheduling horizon are indicative. Adopting this approach, storage facilities can be more efficiently operated, since the problem of defining the appropriate energy level of the storage devices during economic dispatch is alleviated. The operational impact of storage is validated via extensive simulations using data from the Greek Interconnected Power System.

This paper presents an overview of the different methodologies and mathematical optimization models developed in the framework of the EU-funded project SiNGULAR towards the optimal exploitation and efficient short-term operation of RES production in insular electricity networks. Specifically, the algorithms employed for the creation of system load and RES production scenarios that capture the spatial and temporal correlations of the corresponding variables as well as the procedure followed for the creation of units׳ availability scenarios using Monte Carlo simulation are discussed. In addition, the advanced unit commitment and economic dispatch models, that have been developed for the short-term scheduling of the conventional and RES generating units in different short-term time-scales (day-ahead, intra-day, and real-time) are presented. Indicative test results from the implementation of all models in the pilot system of the island of Crete, Greece, are illustrated and valuable conclusions are drawn.

The integration of the day-ahead electricity markets in Europe shall lead to one multi-area market that will substitute the local/national ones. In view of the “target model” that will be enforced in all European markets in conjunction with their forthcoming coupling/integration, a centralized market splitting algorithm is implemented in this paper, respecting the standard market regulatory framework of power exchanges (PXs) and power pools, including 1) block offers/bids, linked block offers/bids, flexible hourly offers/bids and convertible block offers in power exchanges and 2) unit technical/commitment constraints and system operating constraints in power pools. The problem is formulated as a mixed integer linear programming (MILP) model, which can be solved using commercial MILP solvers. The performance and computational requirements of an implementation in pan-European level is presented in the companion paper; the model is tested in terms of problem solvability to its limits, considering a day-ahead market clearing time threshold equal to one hour.

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.

A centralized market-splitting algorithm is implemented in this paper in a Europe-wide level, comprising both power pools and Power Exchanges, with each local/national market respecting the standard constraints imposed by its own regulatory framework, including the full set of unit technical/commitment constraints and system operating constraints in power pools. In view of the forthcoming large-scale RES penetration, physical markets with unit-based offers (either pools or PXs) check the feasibility of the electricity market solution against their internal (intra-zonal) transmission network constraints, considering full network topology. This is accomplished through an iterative process, iterating between the overall optimization algorithm, and intra-zonal power flows of the countries/regions, which identify possible congestions and incorporate additional constraints in the central pan-European market-splitting problem. The iterative process terminates when all internal transmission constraints are satisfied. Locational marginal prices (LMPs) can be computed in the physical markets, whereas zonal/system marginal prices are computed in markets with portfolio-bidding schemes. The proposed algorithm is tested in terms of computational efficiency using the full UCTE network.

The integration of the spot electricity markets in Europe shall lead to multi-area power exchanges that will substitute the local markets. In view of the “target model” that will be enforced in all European markets and the forthcoming coupling/integration of the Greek with the Italian electricity market, a volume-based market coupling between a power exchange (PX) and a power pool is implemented in this paper. The pros and cons of this approach are quantified, and the attained results are compared with the results of a single market splitting approach, in terms of pricing, overall social welfare and computational time.

A model for the solution of a European-type day-ahead market with multi-period products is presented in this paper, though considering a nodal network representation and including N and N−1 transmission security constraints. An iterative process is employed, similar to the process implemented in the U.S. markets, coordinating a market clearing problem (formulated as a Mixed Integer Linear Programming-MIP model) with an AC load flow solution, in order to check the apparent power flows of transmission lines against their respective limits, accounting the influence of voltage magnitudes and reactive power on the system lines' power flows. A distributed-slack modelling is used, in order to ensure the robustness of the attained Locational Marginal Prices, so that they are independent of the selection of the system reference node. The model is evaluated in terms of pricing and computational efficiency using the Balkan nodal power system.

A model for the solution of a European-type day-ahead market with multi-period products is presented in this paper, though considering a nodal network representation and including N and N-1 transmission security constraints. An iterative process is employed, similar to the process implemented in the U.S. markets, coordinating a market clearing problem (formulated as a Mixed Integer Linear Programming-MIP model) with an AC load flow solution, in order to check the apparent power flows of transmission lines against their respective limits, accounting the influence of voltage magnitudes and reactive power on the system lines' power flows. A distributed-slack modelling is used, in order to ensure the robustness of the attained Locational Marginal Prices, so that they are independent of the selection of the system reference node. The model is evaluated in terms of pricing and computational efficiency using the Balkan nodal power system.

The increasing shares of renewable energy in power systems have a significant impact on the operation of electricity markets and grids worldwide. This paper provides an overview of the main challenges that high shares of renewable generation introduce in the power system management and electricity markets operation as well as a brief description of potential solutions for alleviating the negative implications caused by the large-scale renewable integration. Additionally, a summary of the core research activity that has been performed in the context of a relevant academic research project, called “Large-Scale Renewable Integration in Electricity Markets”, (acronym, “LaRInEM”) is presented and valuable conclusions regarding the efficient integration of large amounts of renewable energy in electricity markets are drawn.

In this paper a nodal-based approach is evaluated for the clearing of the pan-European day-ahead electricity market. In the proposed mathematical formulation, the widely used in European Power Exchanges (PXs) profile block orders are explicitly modeled, whereas the full set of inter-zonal and intra-zonal normal and security (N-1) transmission constraints is incorporated. The proposed approach is evaluated using a real-world power system, the Balkan power system, and the economic and computational aspects of the proposed methodology are thoroughly discussed.

The determination of reserves in a power system with high wind penetration is necessary to maintain the system balance in an economic way, especially in insular power systems where no interconnections to neighboring systems exist. This paper addresses the problem of quantifying the amount of spinning and non-spinning load-following reserves required for the normal operation of an insular power system using a two-stage stochastic optimization modeling framework. First stage (here-and-now) decisions represent the day-ahead scheduling performed by the System Operator, while the various realizations of the real-time operation of the power system modeled through a set of wind generation scenarios are second-stage (wait-and-see) decisions. Energy and reserves are jointly optimized. Test results from the application of the proposed model in the insular power system of Crete, Greece, are presented and thoroughly discussed.

The integration of the European electricity market constitutes a critical and contemporary issue, expected to take place within year 2015. In view of the forthcoming RES penetration, physical markets with unit-based offers-either power pools or Power Exchanges (PXs)-check the feasibility of the electricity market solution against their intra-zonal transmission capacity constraints. An iterative process is examined, with two variations, differentiating only in the way that the internal network of each physical market is represented. In each iteration of the proposed algorithm, intra-zonal power flows are calculated, possible violations of internal transmission limits are identified and additional constraints are incorporated in the centralized market splitting problem, in order to avoid the overloading of internal transmission lines. The attained results are compared to those of a centralized market-splitting problem, considering the full European network configuration. The above methods are compared in terms of (a) solution efficiency, (b) correct pricing and (c) computational efficiency.

The “Target Model” for the European electricity markets integration has received the attention of regulators, economists and market designers in the last years, namely the substitution of local electricity markets with a harmonized multi-area market, with same market segments in all European countries. In view of this market integration, a Europe-wide market-splitting model is presented in this paper, in which each national market retains its regulatory framework/design, namely remains a power pool or a Power Exchange. The developed model is tested in a Europe-wide test case, comprising three power pools and twenty two existing and prospective Power Exchanges. The model solution and the computational efficiency of the proposed implementation are presented here.

In view of the forthcoming large-scale RES penetration, physical markets should check the feasibility of the electricity market clearing against their internal (intra-zonal) transmission network constraints, considering full network topology. Three methods for the solution of a market-splitting problem in a Europe-wide level are implemented in this paper. Two iterative processes are employed, iterating between the overall optimization algorithm and intra-zonal power flows of the countries/regions that identify possible internal congestions; the iterative processes terminate when all internal transmission constraints are satisfied. The results of the iterative processes are compared with the results of a one-stage solution of the overall problem, which incorporates the full set of transmission constraints of all European electricity markets. The proposed algorithms are also compared in terms of computational efficiency using the full UCTE network.

Recent developments in European Union's legal and regulatory frameworks are leading to the creation of the Internal Electricity Market, which will substitute the local spot electricity markets. In this direction, a volume-based market coupling approach between a Power Exchange (PX) and a power pool is implemented in this paper, in order to examine the feasibility of the aforementioned integration between markets with significant diversity in their design. The results of the volume-based approach are compared to those of a single market splitting approach, in terms of pricing, overall social welfare and computational time.