A standard framework to analyze electricity market couplings and system operator coordination

The efficient use of interconnected power system infrastructures is a key to a successful integration. By revisiting existing literature, this work proposes a modular framework to analyze the various mechanisms involved in market couplings and system operator coordination. The framework is built around four modules: (a) determination of the space of possibilities; (b) allocation of this space of possibilities; (c) coordinated congestion alleviation; and (d) necessary agreements. Results are three-fold. First, the definition of the modules highlights that, along existing successful market couplings, several perspectives of improvement exist, such as cooperation between system operators for balancing and data sharing. Furthermore, a key policy choice is how to split the global space of possibilities between various kinds of products (e.g., energy or frequency control) and time horizons (e.g., yearly and daily products). Second, the description of the interactions between modules shows strong interdependencies. In particular, market design choices directly impact transmission system operator's practices. Therefore, the global coherence of the selected mechanisms should be a prime concern. Third, this framework can guide further study and analysis as illustrated with a monitoring board of the electricity market integration process in the Central West European region. Therefore, this framework could be used to strengthen a common understanding of the issues related to market integration, which would support the EU's initiatives aiming at fostering consensus and agreements on a target model.