European market integration with both physical and non-physical markets

In view of the forthcoming large-scale RES penetration, physical markets should check the feasibility of the electricity market clearing against their internal (intra-zonal) transmission network constraints, considering full network topology. Three methods for the solution of a market-splitting problem in a Europe-wide level are implemented in this paper. Two iterative processes are employed, iterating between the overall optimization algorithm and intra-zonal power flows of the countries/regions that identify possible internal congestions; the iterative processes terminate when all internal transmission constraints are satisfied. The results of the iterative processes are compared with the results of a one-stage solution of the overall problem, which incorporates the full set of transmission constraints of all European electricity markets. The proposed algorithms are also compared in terms of computational efficiency using the full UCTE network.