University of California Energy Institute

PWP-076

Economic Congestion Relief Across Multiple Regions Requires Tradable Physical Flow-gate Rights

Shmuel S. Oren and Andrew M. Ross (University of California, Berkeley)


This paper is concerned with market-based protocols for relieving congestion caused by transactions outside the control area in which the congestion occurred. Two approaches based on alternative decomposition techniques are discussed. The first approach proposed by Cadwalader, Harvey, Hogan and Pope is based on dual decomposition in which out of area congestion is "priced-out" and added to the OPF objective function of the control area operator while the prices are determined iteratively via nodal energy adjustment bids. The paper demonstrates through a simple a simple three node example that even with "correct prices" on out-of-area congested interfaces, the augmented AC-OPF objective function of a control area operator may not be locally convex at the optimal solution and hence the control area's optimal dispatch may violate the thermal constraints on out-of-area interfaces. This observation indicates that prices alone are insufficient for coordination of congestion relief across multiple control areas and more direct enforcement of thermal limits on congestion prone interfaces are needed. That conclusion supports the alternative "flow-based" approach, which is consistent with NERC's FLOWBAT proposal for interzonal transmission load relief (TLR).  The flow-based approach coordinates congestion by requiring that any in or out of area transaction be backed by rights to the flow they induce on congested flowgates. The prices for these rights are determined through secondary markets for transmission rights whereas the feasibility of the flows is ensured by the limits on the number of rights issued for each congestion prone flowgate.