  The European day-ahead electricity market is split into multiple bidding
zones with a uniform price. The increase in renewables leads to a growing
number of interventions in the generation of energy sources and increasing
redispatch costs. To ensure efficient congestion management, the EU Commission
mandated a Bidding Zone Review (BZR) to reevaluate the configuration of
European bidding zones. An integral part of this process was a locational
marginal pricing study. Based on this study, alternative bidding zone
configurations were proposed. These bidding zones shall be stable and robust
over time. For Germany, four configurations were suggested. We analyzed the
proposed configurations considering different clustering algorithms and periods
based on the publicly released data set. We found that the configurations do
not reduce the price standard deviations within zones much, and the average
prices across zones are similar. Other configurations identified based on
clustering the prices lead to lower price variance but they are not
geographically coherent. Independent of the clustering features and algorithms
used, the resulting clusters are not stable over time. While the costs of a
bidding zone split in Germany are high, the effect on prices would be low based
on an analysis of the new BZR data.
