PARTIAL NETTING IN COORDINATED AUCTION FOR TRANSMISSION CAPACITY

Summary: Should the market players be allowed to withdraw their contracts? Should they be able to receive money for activity relieving the congestion? Are these two questions not physically excluding each other? When one speaks about coordinated auctions and netting these kind of questions keep on popping in. If contracts on users were firm, market players would be able to receive congestion boni for power flows in the direction opposite to congestion, under imposed obligation to use their capacity rights. If contracts were interruptible, more freedom would be given to the parties involved i.e. no obligation to use the capacity, but receiving money for relieving congestion would be impossible. This dilemma illustrates a trade off that has to be faced between flexibility of “right-without-obligation ” and economic efficiency of “right-and-obligation”. In this paper, the authors propose to solve this dilemma by creating for market players a chance to take this decision individually – they can decide themselves whether they want to have their contracts firm or interruptible and to what extent. This method combines the advantages of both approaches while minimizing their drawbacks