Regional congestion management and inter-TSO compensation in cross-border electricity trading

The paper describes the analysis relevant for the discussion on cross-border transmission lines in an integrated European electricity market. Since the subject issues (trading rules, congestion, transit, tariffs, investment) are interconnected and may influence each other, this represents an extensive and complicated set of problems. The influence of electricity trading, congestion and transit on market participants in each area has been discussed. Market participants are generators (traders), suppliers (customers), and TSOs. An example is given with four connected areas, where the benefits and losses for the involved parties are shown. Our findings illustrate how a coordinated trading mechanism (congestion, transit) increases market competition and interconnection usage and reduces market player risk and generates revenue employing market based methods.