Inter-regional financial transmission rights in multi-area power systems

We consider the problem of developing interregional financial transmission rights (FTRs) in an interconnected power system. First, we define inter-regional FTRs according to bidding locations to hedge the tie-line congestion risks for the interchange scheduling between areas. Second, we develop the shift factor based coordinated FTR auction model in multiarea power systems, which maintains the internal privacy of each area through network equivalence. Third, we explain the revenue inadequacy problem under joint economic dispatch (JED) and develop a surplus exchanging approach to solve it. Properties of the settlement approach are illustrated, including revenue adequacy, independent of the phase angle reference bus selection, and computational efficiency. Simulations demonstrate the effectiveness of the proposed coordinated FTR auction model and settlement approach.