Simultaneous energy and transmission auction

Summary form only given. A simultaneous forward (e.g., day ahead) energy and transmission auction model is presented. In this model, market participants, including energy and transmission capacity bidders, may submit any number of hourly and block offers and bids into a multi-location market. In this market, transmission capacity offered as transmission rights will be available for use in the energy market only if the relevant locational energy price differences are high enough for the transmission rights offer. As such this marker allows new investors in transmission capacity to avoid free-rider issues in the forward auction. At the same time this market can readily accommodate traditional financial transmission rights (FTRs). Market participants can place any limits on their offers and bids and the market operator can set a limit on the total value of trade by each market participants. An example of a 5-zone market auction is provided to show the application of the proposed simultaneous energy and transmission auction model.