At present, China's inter- and intra-provincial market system is still in its infancy, and market mechanisms, operation methods and clearing models are yet to be explored. The commonly used modeling approaches in the existing literature include path-based and sensitivity-based optimal clearing approaches. The path-based approach increases the dimensionality of decision variables in the high-low matching discounting process, resulting in a large model size. And, the sensitivity-based approach adopts an integrated clearing method but does not provide an applicable pricing mechanism. To address these issues, this paper constructs a sensitivity-based inter- and intra-provincial electricity market clearing model that considers different ways of collecting transmission fees. Furthermore, the nonlinearity introduced by the transmission fees is linearized and the locational marginal price (LMP) method is used to solve the problem of unclear pricing of the sensitivity-based model. China's transmission lines include inter-regional transmission lines, intra-regional inter-provincial transmission lines and intra-provincial transmission lines. Their transmission pricing mechanisms are introduced and their impact on the supply and demand balance in the electricity market are analyzed. As the evolution of the national unified electricity market, the inter- and intra-provincial electricity market will go through three stages of bi-level stage, loosely-coupled stage and tightly-coupled stage. The degree of coupling between inter-provincial and intra-provincial markets varies at different stages, with the lowest degree of coupling at the bi-level stage and the highest degree of coupling at the tightly-coupled stage. The clearing model and the pricing model were constructed for the three stages. And the proposed pricing mechanism derives the price for each node adopting the LMP method, which has good characteristics such as incentive compatibility and non-discrimination. To verify the effectiveness of the proposed clearing model and pricing model, simulations were conducted in the IEEE 39-bus and 118-bus systems. The clearing results show that the social welfare in the bi-level stage, loosely-coupled stage, and tightly-coupled stage is 27 028 061 ¥, 30 543 641 ¥, and 31 874 432 ¥, respectively. Also, the transmission power of cross-regional tie-lines is the highest in the tightly-coupled stage indicating high utilization of the cross-regional tie-lines. Besides, the pricing results show that the imbalance funds in the bi-level stage, loosely-coupled stage, and tightly-coupled stage are 2 801 963 ¥, 2 051 259 ¥, and 0 ¥, respectively. And, the price at each node is different due to the transmission fees of intra-regional inter-provincial AC tie-lines. Further, the impact of transmission fees on clearing results and pricing results was analyzed. As the transmission price of inter-regional transmission lines increases, both the transmission volume and social welfare decrease, and the average price in the receiving provinces increases while the average price in the sending provinces decreases. As the transmission price of intra-regional inter-provincial transmission lines increases, the difference in electricity prices between the nodes becomes more pronounced. Assuming that the intra-provincial transmission price in both the sending and receiving provinces decreases by 10 ¥/(MW·h), the bids for generators and loads in the sending provinces increase by 456 MW·h and 481 MW·h, respectively, while the bids for generators and loads in the receiving provinces increase by 3 804 MW·h and 3 781 MW·h, respectively. The following conclusions can be drawn from the simulation analysis: (1) Inter-provincial transmission can increase social welfare and promote optimal resource allocation. And the tightly-coupled stage clearing is best able to maximise social welfare. (2) The proposed pricing mechanism remains applicable when considering multiple transmission fees and has the advantages of LMP. And the pricing mechanism provides a reasonable pricing methodology for sensitivity-based clearing models. (3) Transmission fees charged according to the actual power flow of transmission lines result in a differential price at each node. The sensitivity of the node to the line in the same direction as the power flow will result in a lower price for the node, and vice versa. © 2024 China Machine Press. All rights reserved.
