Energy systems analysis considering cross-border electricity trading: Coupling day-ahead markets in an agent-based electricity market model

Abstract

Cross-border electricity trading can provide efficient allocation of power generation and demand, while also addressing the variability of renewable energy sources. In order to fully enable cross-border electricity trading, closer coupling of national electricity markets is essential. In this regard, we present a new day-ahead market coupling mechanism as part of AMIRIS, an open agent-based market model for investigating renewable and integrated energy systems. The proposed approach looks as follows: Traders can either sell power generation capacities (e.g. conventional power plants, renewables, flexibility options) or ask for supply capacities when participating on the national, respectively market-zone specific day-ahead markets. Then, these bids and asks are forwarded to a central market coupling agent, which aims to maximize overall welfare by efficiently dispatching cross-border demands. At all times, the algorithm considers available transfer capacities between participating markets. Our algorithm guarantees correctness and termination within tolerance parameters, utilizing two criteria: (1) shifting only the minimal-effective-load at a time and (2) processing the most-effective-pair of all possible combinations first. The simulation is executed using the framework FAME. Our implementation of the proposed mechanism is demonstrated in a case study, which illustrates the potential impact of cross-border electricity trading. This case study serves as a proof-of-concept for the practical application of our approach, which is soon to be published as a fully open-source feature of AMIRIS. Although the approach was developed for cross-border electricity trade, it is also suitable for assessments of smaller market zones (e.g. nodal pricing).