Impact of the limitations of transmission line capacity on pricing

Abstract

The paper considers the influence of the capacity of cross-border lines on the price formation in different electricity market zones. Nonlinear programming is used for optimum unit commitment (UC) and dispatch of power plants, also considering electricity import options. Mandatory procurement of electricity is taken into account in the algorithm proposed in this paper. The computational effectiveness of the algorithm is discussed. The influence of cross-border capacity limitations on the pricing is proved.