Energy Systems Analysis Considering Cross-Border Electricity Trading: Coupling Day-Ahead Markets in an Agent-Based Electricity Market Model

This work introduces a new day-ahead market coupling mechanism as part of AMIRIS, an agent-based market model for renewable and integrated energy systems. The mechanism enables researchers to analyze cross-border electricity trading and its effects on electricity markets. Bids and asks of local traders are processed by a central “MarketCoupling” agent. This agent minimizes total system costs of providing electricity by dispatching cross-border demands based on available transfer capacities. The proposed algorithm achieves cost-effective market coupling by prioritizing transfer between markets with the highest price differences. The implementation is demonstrated in a case study of four interconnected markets. The results indicate a re-allocation of demand from the more expensive markets to the cheaper ones, leading to a minimization of total system costs. Computation times are roughly doubled compared to runs without market coupling, but still remain under 9 minutes per run for a comprehensive European scenario for a full year when executed on a standard laptop computer. Besides large-scale cross-border coupling, the algorithm could also be used for much smaller market zones (i.e. “nodal pricing”). It is available as part of the open-source model AMIRIS.