Methodology of market coupling/splitting for efficient cross-border electricity trading

In the article we present connection of nodal pricing with market splitting on price areas of different size. It is shown that market coupling of areas in regional market can make positive and negative impacts on participant´s behavior. It is modeling and analyzing imaginary market in Matlab/Matpower with presumption that we have four connected areas in market and common power exchange. A main objective is to consider the benefits that can be achieved by a better approach to managing congestion, where the regional power market is considered in its entirety, independent of the national borders and the geographic location of the different system operators. Consequently, we wish to evaluate alternative zonal definitions in the regional grid. So, the methodology could be set as follows: compute nodal prices in regional market, define zone if nodal prices are similar, make zones according to congestions regarding country borders.