Analysis of power pools in the deregulated energy market through simulation

The electricity market has changed rapidly in the Northern European countri es. Harmonisation of the legislation and trading methods widens the market area outside national limits. Vertical integration among electricity compan ies is changing the traditional structure of the inner market. Successful b usiness in this new, more volatile market requires sophisticated techniques for identifying new market opportunities and managing the increased risks. We study the new market from the perspectives of regional distributors and power pools. We analyse the trading possibilities and profitability of diff erent kinds of power pools, when a spot market and several new contract str uctures are available along with existing capacity-based long-term contract s. Different policies for allocating the common benefits of a power pool am ong its members are compared and a new booking algorithm for balance settle ment is introduced. To analyse the operation of different kinds of pools, we use simulation and optimisation techniques. (C) 2001 Elsevier Science B.V. All rights reserve d.