Transmission congestion and inconsistent market rules between regions can impose additional costs to consumers and jeopardize the reliability of interconnected grids. Efficient grid improvement can enhance the transfer capability of the interconnected grids and reduce the congestion costs to consumers. On the other hand, different operation entities may have different market structures and rules to clear energy market and handle congestion. How congestion inside an individual market is handled has important consequences on power flows and prices in neighboring markets.
This proposal is focused on the economic analysis of congestion management rules and the optimization of grid improvement decisions for social welfare enhancement in multiple electricity markets. Different inter-regional coordination of congestion management rules will be compared for the purpose of social cost and benefit analysis. We will also explore how different congestion management methods affect the strategic behaviors of the market participants and the market equilibrium of an individual market in interconnected grids with multiple markets. Global optimization techniques will be applied to analyze the economic value of transmission capacity improvements incorporating the complex characteristics of large-scale nonlinear power systems. The expected results of this research are systematic methods to improve grid decisions for enhancement of social welfare and efficient inter-regional market coordination to remove barriers of inter-regional energy trading.
