An Analysis of Market-to-Market Coordination

Interregional transmission congestion presents significant challenges for Regional Transmission Operators (RTOs), particularly when loop flow diverts electricity from scheduled paths, occupying neighboring grids and increasing congestion costs. To mitigate this cross-regional congestion, RTOs employ a market-to-market (M2M) process through an iterative method, in which they exchange real-time security-constrained economic dispatch solutions and communicate requests for congestion relief. While this method provides economic benefits, it struggles with issues like power swings and time delays. To explore the full potential of M2M enhancements, in this paper, we first analyze the current M2M iterative method practice to better understand its efficacy and identify places for improvements. Then, we explore enhancements and develop an ADMM method for M2M coordination that optimizes congestion management. Specifically, our ADMM method can achieve a minimal cost that is the same as the cost obtained through a centralized model that optimizes multiple markets altogether. Our final case studies, across a comprehensive set of multi-area benchmark instances, demonstrate the superior performance of the proposed ADMM algorithm for the M2M process. Meanwhile, we identify scenarios where the existing M2M process fails to provide solutions as a by-product. Finally, the algorithm is implemented in an open-source package UnitCommitment.jl for easy access by a broader audience.