Evaluations of bilateral transactions in electricity markets in aspects of optimal dispatch and transmission pricing

This paper presents the study of bilateral transactions in electricity markets in aspects of optimal dispatch, system flow and transmission pricing using optimal power flow. The paper also introduces the evaluation of transmission pricing for all market participants by using nodal prices. Transmission costs, generator revenues and load expenditures in both bilateral and nonbilateral cases are calculated and compared. The numerical example of a 30-bus test system shows that bilateral transactions could have significant effects on system flow and nodal prices, causing transmission costs to change. The study also concludes that transmission pricing, if applied properly to all market participants, could be an effective tool for system operator to regulate the use of transmission grids effectively.