Formation of Bidding Zones Based on Linear Bottleneck Games

Predefined bidding zone formation is an essential requirement in some of the congestion management schemes. In a meshed network, forming bidding zones commensurate with the transmission bottlenecks is a challenge. A rare or no occurrence of congestion within zonal periphery is usually the basis for its formation. In this paper, the concept of linear bottleneck games is proposed for the formation of congestion-free bidding zones that include nodes with similar contribution to the congestion. This is achieved in two primary steps: first is to split the network into multiple zones on the basis of locational marginal prices using diakoptics; second is to identify the optimal zonal combination and crucial nodes by solving a primal-dual linear programming model. Its efficacy is explained on a six-bus system with additional results on the IEEE 39-bus system and the 193-bus Western regional grid of India.