Optimal Computation of Network Indicators for Electricity Market Bidding Zones Configuration

The paper presents an optimization model to compute network indicators for a model-based approach to define alternative bidding zone configurations in the framework of a Bidding Zone Review process compliant with the Commission Regulation (EU) 2015/1222 (CACM) and Regulation (EU) 2019/943 of the European Parliament and of the Council (CEP). The model is used to compute Locational Marginal Prices and, in the optimal point, Power Transfer Distribution Factors for critical elements. These indicators can be processed by clustering algorithms to identify alternative bidding zone configurations. The proposed model considers explicitly the N-1 security criteria (largely neglected or very simplified in literature) for transmission system operation. The algorithm is tested on relevant historical operating scenarios of the Italian transmission network, showing the model's ability to both provide results supporting the existing bidding zone configuration, as well as suggesting interesting alternatives.