Optimization of the Austrian electricity sector (control zone of VERBUND APG) by nodal pricing

The liberalization of the electricity market split the previously vertically integrated and state-regulated companies into three different companies: production, transmission and distribution. This in turn exposed the companies to competitive conditions (especially so for the production branch). This new economic order made some of the established tools for optimized operation of the whole system obsolete, as the newly independent companies now pursued their own specific goals. This paper introduces an optimization model for the Austrian electricity market which meets the requirements of the new economic situation in the electricity branch and maintains the context for optimizing the whole system.