1. 16 November 2015 Delft University of Technology Electrical Power System Essentials ET2105 Electrical Power System Essentials Dr.ir. Pieter Schavemaker Electricity Markets

2. 2 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Concepts of The E-market Possible and desirable to separate the transportation from the thing transported Electricity  product Transmission  service

3. 3 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials E-market  Other Markets Buyers and sellers agree on a price 1 Big difference: Electricity cannot be stored in large quantities  impact on prices Factors that complicate the ‘product’ Electricity cannot be labelled Power flows cannot be controlled by financial instruments

4. 4 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Organizationtrade export import primaryenergyproductionconsumption transmission & distribution system services

5. 5 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials PX – Power eXchange DAM – Day Ahead Market

6. 6 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Market Clearing MCV MCP

7. 7 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials APX

8. 8 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials The Single Electricity Market Goal: Maximize the social welfare in Europe

9. 9 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Social Welfare QuantityQ NL Price P NL NLdemand supply Quantity Price P DE DE demand supply Q DE Social welfare = benefits of the buyers - costs of the sellers

10. 10 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Increase the Social Welfare by Import and Export DE: export Price demand supply Quantity P DE Q DE P DE * Q DE * Price P DE ExportImport Net export curve

11. 11 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Increased Social Welfare by Import and Export Price ExportImport DE NL ImportExport P* Q*

12. 12 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials If the Interconnector Capacity is not Sufficient... Price ExportImport Q* = ATC DE NL ImportExport P NL * P DE *

13. 13 7. Electricity Markets | 13 ET2105 Electrical Power System Essentials Congestion management congestion management non-market based market based implicit auction zonal pricing market coupling market splitting nodal pricing explicit auctions