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The Effects of Transmission-Rights Pricing on Multi-Stage Electricity Markets (2401.15772v1)
Published 28 Jan 2024 in math.OC and cs.GT
Abstract: Cross-border transmission infrastructure is pivotal in balancing modern power systems, but requires fair allocation of cross-border transmission capacity, possibly via fair pricing thereof. This requirement can be implemented using multi-stage market mechanisms for Physical Transmission Rights (PTRs). We analyse the related dynamics, and show prisoner's dilemma arises. Understanding these dynamics enables the development of novel market-settlement mechanisms to enhance market efficiency and incentivize renewable energy use.