Zonal and Nodal Models of Energy Market in European Union

Abstract

Along with economic development and development of power systems, new, more effective models of the energy market are sought. Traditional zonal models used on the electricity market have proved to be poorly adapted to new circumstances and phenomena occurring in the macroeconomic environment. The main aim of the research was to show the direction (including the nodal model and prosumer behavior) in which the energy market should develop in order to meet the state-of-the-art technical, ecological and social challenges. Therefore, with the new challenges, a new chapter has opened up on very interesting research for the electrical industry. There are new solutions for the development and modernization of models from the point of view of management and econometrics of the energy market, adapted to new challenges related to ecology, technology, and competition. This article presents the zone model with its imperfections and suggestions for its improvement and proposes a nodal model that may in the near future become a new model for the functioning of the electricity market in Europe.