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An analysis of electricity congestion price patterns in North America

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  • Godin, Frédéric
  • Ibrahim, Zinatu

Abstract

The present paper illustrates the use of principal component analysis (PCA) on the congestion component of local (i.e. zonal) electricity price data to detect the most salient congestion patterns in electricity transmission grids managed by either a Regional Transmission Organization (RTO) or an Independent System Operator (ISO). Outputs from the PCA along with some data visualization tools are shown to make the identification of such patterns seamless and straightforward. An empirical analysis is conducted for three North American power systems, namely NYISO, ISO New England and PJM. Finally, a simple time series model representing the evolution of PCA scores is proposed.

Suggested Citation

  • Godin, Frédéric & Ibrahim, Zinatu, 2021. "An analysis of electricity congestion price patterns in North America," Energy Economics, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:eneeco:v:102:y:2021:i:c:s0140988321003893
    DOI: 10.1016/j.eneco.2021.105506
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    Cited by:

    1. Apergis, Nicholas & Pan, Wei-Fong & Reade, James & Wang, Shixuan, 2023. "Modelling Australian electricity prices using indicator saturation," Energy Economics, Elsevier, vol. 120(C).

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    More about this item

    Keywords

    Principal component analysis; Power markets; Electricity grid; Transmission constraints; Congestion price;
    All these keywords.

    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities

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