Optimization Approach of Inter-Regional Electricity Transmission Price Considering the Cooperative Game Strategy of Generators

Due to the uneven distribution of load centers and renewable resources in geographical locations, the reasonable allocation of resources in a wider range requires cross-regional electricity transmission. With the development of inter-regional electricity transmission and the power market, generators participating in the inter-regional market clearing may exercise market power through cooperative game strategies to maximize their own interests, resulting in the reduction of the utilization rate of inter-regional electricity transmission channels and thus influencing the recovery of lines’ permitted income. In response to the above problems, this paper proposed a tri-level model to optimize inter-regional electricity transmission price considering the cooperative game strategy of inter-regional units in the electricity market environment. The upper layer is a transmission electricity price optimization model with the goal of stable recovery of permitted income. The middle layer is a decision-making model of the report volume with the goal of the maximum revenue of the alliance. The lower layer is the regional power market clearing model with the participation of power generators outside the region. An modified C&CG algorithm was implemented to solve the proposed model, decomposing the model into master and sub-problem to be solved in alternating iterations. The master and sub-problems as the two-layer model were solved by converting Carlo-Kuhn-Tucker condition (KKT) and big M method into equivalent monolayer model, while the bilinear terms in the master and sub-problem models were transformed by strong duality theorem and variable discrete parametric method. Finally, PJM-5 node system demonstrates the proposed tri-level optimization model can better reflect the strategic decision and market power behavior of cross-region clearing interest alliance formed by power generators outside the cooperative game strategy, ensuring the formulation of transmission price can realize the stable recovery of the permitted income of the line under the influence of the cooperative game strategy of power producers outside the region. © 2024 South China University of Technology. All rights reserved.