A market splitting approach for the European electricity market integration

The “Target Model” for the European electricity markets integration has received the attention of regulators, economists and market designers in the last years, namely the substitution of local electricity markets with a harmonized multi-area market, with same market segments in all European countries. In view of this market integration, a Europe-wide market-splitting model is presented in this paper, in which each national market retains its regulatory framework/design, namely remains a power pool or a Power Exchange. The developed model is tested in a Europe-wide test case, comprising three power pools and twenty two existing and prospective Power Exchanges. The model solution and the computational efficiency of the proposed implementation are presented here.