Integrated energy and transmission pricing

Vaishya, S R and Sarkar, Vaskar (2017) Integrated energy and transmission pricing. In: Annual India Conference, INDICON, 16-18 December 2016, Bangalore; India.

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Abstract

This paper introduces the concept of transmission side bidding for availing power transmission services through a market mechanism. The transmission side bidding, in essence, refers to the direct market participation of transmission line owners for selling their line capacities with appropriate price offers. The transmission offers are submitted to the centralized auction conducted by the independent system operator for carrying out dispatch scheduling or for the issuance of transmission rights. Those are jointly cleared along with other bids and offers, and bid-consistent prices are established by means of marginal pricing. The uncertainty that gets involved in revenues or payments of market players because of the conventional transmission pricing is, therefore, eliminated. By recognizing the criticality of power flow interactions between different transmission lines, the auction participation of transmission line owners is suitably regulated. The issuance of financial transmission rights (FTRs) is supplemented by assigning counterflow flowgate rights to the transmission line owners so as to ensure revenue adequate FTR settlement. Detailed case studies are performed to verify the utility of the proposed transmission pricing methodology.

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