| This thesis examines the unique characteristics of electricity markets, summarizes the similarities and differences between zonal and nodal pricing systems, and describes the zonal congestion management method implemented by the CAISO during 1998--2003.; The thesis summarizes nodal prices calculations, reviews the theoretical fundamentals for nodal prices, and compares different methods to obtain these values. It also illustrates how transmission congestion and losses affect nodal prices.; An OPF model capable of including price caps based on duality theory is developed. This model reveals how price caps affect nodal prices, generation, and load. The concepts are demonstrated using the "New England 16 bus test system."; Finally, an Automatic Zone Creation/Merging/Partition Methodology is proposed. This method exploits the characteristic that the nodal price patterns associated with zonal and nodal prices are largely a function of the network and do not strongly depend on the specific prices at the various generators. The best organization of zones is not always according to pure geography or company boundaries, but according to electrical connectivity, topology and impedance characteristics of the transmission grid. The method is illustrated by means of case studies based on the California transmission system. |
