Congestion management and transmission rights in centralized electric markets

Abstract

A new congestion management system is proposed, applied under nodal and zonal dispatches with implementation of fixed transmission rights (FTR) and flowgate rights (FGR), respectively. The FTR model proves to be especially suitable for congestion management in deregulated centralized market structures with nodal dispatch, while the FGR is suitable for decentralized markets. The main contribution of this work is a nontraditional valuation of FGR under a centralized market, such as those present in Latin America, that builds a link between both transmission rights under the same market structure. To accomplish that, a computational model is developed, implementing marginal theory where congestion components are introduced in the pricing model. An application to the Chilean Central Interconnected System indicates that FGR presents advantages over FTR regarding signals on grid use, but its application results in complications that make its implementation unattractive.