Generalized model for fixed transmission rights auction

Abstract In the open access deregulated power market, fixed transmission rights (FTR) are proposed to facilitate the way to deal with transmission congestion issues. When these rights are utilized with locational marginal prices, they lead to an efficient use of the transmission system and assign prices to transmission system users based on the way energy is actually delivered. These rights are primarily proposed as purchased rights that can hedge congestion charges on constrained transmission paths. By holding an FTR, transmission customer gains advantageous features such as gaining a mechanism to offset the extra cost due to congestion charges when some lines are constrained, provide financial certainty, provide operational certainty and maximize efficient use of the system. To guarantee its availability to all parties on a non-discriminatory basis, these rights should have a mechanism to permit system users to buy, sell and trade FTRs. This mechanism is guaranteed by conducting an auction for these rights. On the other hand, trading these rights in secondary markets can self-arrange access across different paths, create long-term transmission rights and provide more commercial certainty. This paper introduces a mathematical model that covers FTR auction operation to model purchase, sale and base case FTRs. Some examples that show auction operations and some operations that are conducted after the action is finished are given in the paper to support the model.