CONICET | Buscador de Institutos y Recursos Humanos

Trade between electric power systems is driven by price differences in the corresponding electricity markets. When cross-border trading involves two or more markets, a regional electricity market could be put in place with different types of agreements and regulations. These cross-border exchanges could imply higher economic welfare for each zone (e.g. country) and a re-distribution of the consumers? surpluses, producers? profits and congestion rents within each zone, hindering regional integration. However, a zonal operator (i.e. national operator or system operator ?that we introduce in this work) could capture social economic-welfare derived from cross-border trading through managing energy-and-reserve strategic offers to be submitted to the regional electricity market. With this in mind, a zonal?strategic? operator, using the proposed model in this paper, could modify zonal generators? offers in the process when they are informed to the regional market. This model is implemented through a bilevel programming problem, where, the upper-level optimization problem seeks the zonal social-welfare maximization of a single zone by means of managing producer?s offers, subject to the regional social welfare maximization, that is represented in the lower-level problem. Energy and reserve market prices and dispatches are obtained through a centralized coordination scheme for regional market-clearing in coherence with welfare optimization. Using KKT conditions, this bi-level model is reduced to a mixed-integer linear programming problem which may be solved using a standard branch-and-cut algorithm. Results from an illustrative example and a case study are hereby reported and analyzed.