Interaction between coordinated allocation of transmission rights and regional markets

Coordinated allocation of transmission rights (CA) is a cross-border mechanism designed to manage congestion at the international level while leaving each region responsible for the management of its internal congestions. The goal of this paper is to show that CA, combined with nodal allocation mechanisms within regions can approximate an integrated nodal congestion management without need of a fully centralized scheme. This goal requires some modification of both CA and regional nodal allocation mechanisms to be able to distribute the overall optimization between them.