Coordinated Transaction Scheduling in Multi-Area Electricity Markets: Equilibrium and Learning

Abstract

Tie-line scheduling in multi-area power systems in the United States largely proceeds through a market-based mechanism called Coordinated Transaction Scheduling (CTS). We analyze this market mechanism through a game-theoretic lens. Our analysis characterizes the effect of market liquidity, market participants’ forecasts about inter-area price spreads, transactions fees and coupling of CTS markets with up-to-congestion virtual transactions. Using real data, we empirically verify that the market outcomes with CTS bidders, employing simple learning algorithms, support the conclusions from our equilibrium analysis of the games.