Regional market simulation with inter-market bilateral transactions

Market simulation is an essential approach for providing insights into the behavior of complicated power systems and volatile electricity markets. By performing transmission and security-constrained optimization of the system resources against spatially distributed loads, market simulation tools can produce realistic projection of market clearing prices and asset utilization levels across the transmission grid. This paper presents a method for incorporating inter-market bilateral transactions into regional market simulation. The proposed method is capable and flexible for the modeling of pre-scheduled and economic-driven interchanges across the markers or control areas on a broader regional scope. Numerical examples based on a simple test system are provided to illustrate the concepts and algorithms. The proposed methodology is then applied to a real regional electric market simulation analysis of the Northeast US system based on publicly available transmission, generation, and demand data.