Cross Border Transmission Capacity Allocation by Multilateral Market Coupling

The problem of cross border interchange and of allocation of exchange capacities between interconnected countries of the European Community has gained an ever increasing importance during the most recent years. The reason for that are to be found in the existing price gap between different countries as well as in the limited exchange capacity of some interconnection corridors. As a result, the European Transmission System Operators (ETSO) committee has issued a sequence of documents illustrating the guidelines for efficient and economic assignment of the available cross border capacity. In addition to the ETSO's efforts, an example of successful multimarket coordination is given by the Trilateral Market Coupling system developed by the transmission system operators of France, Belgium and the Netherlands. In the present paper, the idea of multilateral market coupling is re-considered and extended to an arbitrary number of interconnected countries. The proposed procedure elaborates the net export curves, relative to each country, by means of a suitable coordinating procedure based on linear programming. Examples of the application of the proposed procedure are given with reference to a small test network as well as to an equivalent model of the European (UCTE) system.