Multi-area electricity market equilibrium model and its application to the European case : an efficient approach to study non-perfect competition

This paper presents an efficient approach for
computing medium-term market equilibrium models under nonperfect
competition, with a focus on multi-area systems, with
multiple market splitting options. In accordance to the new
policies and regulations aimed at creation of the Internal
Electricity Market (IEM), Europe is evolving towards an
integration of the electricity markets under a unified
framework. Integrating the electricity markets already existing
in the European countries represents a great challenge, since
multiple agents’ strategic behaviors may appear depending on
the state of the interconnections. When modeling this effect, the
aim is to characterize each strategy by means of a conjectured
price response, as a function of the states of the network. The
methodology introduced in this paper reduces the possible
network configurations thereby making the problem
computationally tractable. Finally, this methodology has been
applied to a two-year planning model for a set of nine European
countries.