Power exchange spot market trading in Europe : theoretical considerations and empirical evidence OSCOGEN

This paper discusses exchange-based spot market trading of electricity in Western Europe, both from a theoretical and an empirical perspective. The theoretical section contains a selection of references to recent and seminal research in this field of research, and touches upon issues such as the dealing with grid constraints, modelling of bidding systems, bidding strategies, types of auctions, pricing and matching rules, types of spot markets, trading systems, and the main benefits and success factors of power exchanges. In the empirical part, it provides an overview of the main features and the functioning of the major existing (and planned) power exchanges in Europe (i.e. APX, Borzen, EEX, EXAA, GME, Nord Pool, OMEL, Powernext, UKPX, and APX UK). The article ends with a glossary of selected terms that are important in this field of research. The information contained should provide useful for the design of bidding tools that can be used by power-only and combined-heat-and-power (CHP) generating companies for generating bids in a liberalised power market environment. JEL Classification Nos.: C62, C78, D44, D81, R32;