Analysis of the Price Coupling Mechanism in the Day Ahead Electricity Markets

The electricity price variation on the spot market and the electricity price increase in recent times are subject to controversy due to the incomplete understanding of the market mechanism. The coupling mechanism of electricity markets is based on increasing social welfare, being defined as the sum of the producer's surplus, the consumer's surplus and the revenues from the congestion. Thus, the market with the lower price exports electricity to the market with the higher price. The paper presents several numerical examples for understanding the coupling mechanism and the effects and particularities of the coupled functioning of the electricity markets. Also, the impact of increasing the share of renewable energy sources and support schemes on the negative prices recorded in the coupled electricity markets is analysed.