Transaction modes of electric energy exchange and their effects on benefit optimization and allocation

The electric power industry throughout the world is becoming increasingly focused on what is being referred to as market based transactions for electric energy exchange. This paper investigates eight modes of transaction in an electricity market and their effects on optimization and allocation of benefit from electric energy exchange. In addition, effects of order and type (spot vs. contract) of transaction are examined. These analyses imply that optimization and allocation of benefit varies significantly depending on various conditions, and thus it is necessary to take them into consideration to carry out electric energy exchange. Moreover, a player between a seller and a buyer can play a key role in market transactions. The player can be not only a passive participant of a transaction as a provider of transmission services but also an active participant as a coordinator of transactions to make the pie (benefit) larger in electricity transactions