Optimization-based auction mechanism for inter-ISO congestion management

The introduction of competition in the electric power industry and the growth of inter-regional trading of electric power requires the development of new market-oriented mechanisms for inter-ISO congestion management. In this paper, we are concerned with the operation of power systems consisting of several interconnected power pools. We propose a decentralized optimization-based auction mechanism to manage inter-ISO congestion. The interaction of adjacent system operators is efficiently taken into account in order to achieve system-wide efficiency. The coordination among ISOs is carried out through a triad sequence of prices at tie-lines.