European day-ahead electricity market clearing model

Following the latest directives, the European Union promoted the integration of local/national electricity markets into one multi-area market, thus allowing the optimal exploitation of the scarce interconnection transmission capacity. In this paper, the authors present a mathematical formulation that explicitly incorporates nearly all market products and transmission constraints currently appearing in the European Power Exchanges (PXs). The proposed clearing model incorporates an optimization problem, formulated as a mixed integer linear programming model, and is solved within an iterative algorithm for the handling of paradoxically accepted block and minimum income orders.