Comparison of congestion management techniques: Nodal, zonal and discriminatory pricing

Pär Holmberg*, Ewa Lazarczyk

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

24 Citations (Scopus)


Wholesale electricity markets use different market designs to handle congestion in the transmission network. We compare nodal, zonal and discriminatory pricing in general networks with transmission constraints and loop flows. We conclude that in large games with many producers and certain information, the three market designs result in the same efficient dispatch. However, zonal pricing with counter-trading results in additional payments to producers in export-constrained nodes, which leads to inefficient investments in the long-run.

Original languageEnglish
Pages (from-to)145-166
Number of pages22
JournalEnergy Journal
Issue number2
Publication statusPublished - 2015

Bibliographical note

Publisher Copyright:
Copyright © 2015 by the IAEE. All rights reserved.

Other keywords

  • Congestion management
  • Counter-trading
  • Discriminatory pricing
  • Large game
  • Nodal pricing
  • Transmission network
  • Wholesale electricity market
  • Zonal pricing


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