Key Market Mechanisms for Cross-Regional Tradings in the Electricity Market: Insights From Theory and Real-World Implementations

Cross-regional electricity trading is critical to optimizing energy resource allocation and enhancing societal benefits. Reviewing theoretical research on key mechanisms of cross-regional electricity markets and drawing lessons from typical markets are of great significance for developing such markets. Firstly, key mechanisms of cross-regional electricity markets are outlined, including market basic structure, trading modes, market coordination mechanisms, and transmission pricing mechanisms. Secondly, the key mechanisms of typical cross-regional trading markets, including those in Europe, the United States, and China, are analyzed and compared. In addition, a summary analysis is conducted on the problems existing in further developing typical regional electricity markets towards cross-regional trading markets, along with corresponding solutions. Moreover, the key issues needing focus in different mechanism designs of cross-regional trading markets are summarized to provide theoretical foundations for other countries or regions.