Competing capacity as defined by the CAM Regulation:
Capacity for which the available capacity in one of the concerned auctions cannot be allocated without fully or partly reducing the available capacity in the other concerned auction;
Definition
Competing Auctions are one of the possible situations found at bundled network points. They occur when an NP in the country or market zone A is bundled with two or more network points in the country or market zone B.
If the available capacity at a certain network point A is less than the sum of available capacity at network point B and C, several bundles with competition constraints are created. That is, so long as the available capacity at A is less than B+C, the sum of allocated capacity must not exceed the available capacity at A, then AB and AC are competing for the amount of A.
If a 1-to-n bundle where multiple adjacent transmission system operators connect to the same specific interconnection point on TSO’s side, the adjacent products (from n adjacent transmission system operators) may be competing to match the available capacity of the TSO on the 1-side. So, in the case illustrated above, since only a total amount of 100 is available at the entry point A and the sum of possible bundled allocation AB and AC is 130, the auctions at that point will be subjected to a constraint.
Auction Results Evaluation:
Short Term Auctions:
the uniform price algorithm is applied to the short term competing auction. The evaluation of the bids takes place in three steps.
- independent evaluation of each auction (available capacity=competition constraint)
- aggregated evaluation of the auctions, in this phase the bid are consolidated and ranked
- determination of clearing price
Auction surcharge in short term auction = price of the lowest successful bid (it applies to all auctions part of the competition scenario). It applies to all the auctions part of the competition.
For further information on how competition constraints affect short term auctions, please go to Uniform Price Algorithm.
Long Term Auction:
all the competing auctions are taking place in parallel. After each bidding round, the results are analyzed and it is checked whether competition constraint is solved. In this case, the competition constraint is removed and the auctions continue independently.
At each price step, the evaluation of demand for the bidding round starts from the evaluation of the competition constraints at the tail auctions and then evaluate the head.
As long as the aggregated demand of all the competing auctions is evaluated in parallel, in order to solve the constraint can be applied large price step to auction an undersell.
Auction surcharge in long term auction = defined by the aggregated demand evaluation.
For further information on how competition constraints affect long term auctions, please go to Ascending Clock Algorithm.
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