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Decentralized coordination of tie-line scheduling and its effects on real-time market clearing, considering virtual traders

Author

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  • Golambahri, Milad Zarei
  • Doostizadeh, Meysam
  • Khanabadi, Mojtaba

Abstract

The coordinated operation of independent yet interconnected power systems necessitates the presence of virtual traders acting as financial intermediaries between Independent System Operators (ISOs). This involvement boosts the efficiency of electricity markets and the operational flexibility of power systems. However, the autonomy of virtual traders in these markets is underexplored. This paper presents a decentralized framework for virtual traders to participate in tie-line scheduling without sharing their sensitive commercial data, thus maintaining their privacy. The framework reduces economic losses from power flow discrepancies and uses dual variable decomposition theory to assess the impact of tie-line schedules on real-time generator output. The generated power is split into two components: one determined by internal constraints via real-time local marginal prices, and another for tie-line power flow, settled at agreed prices with virtual participants. The results of applying the proposed model to a 6-bus two-area, a modified IEEE 118-bus three-area, and a 472-bus four-area test systems with the presence of virtual traders, demonstrate the accuracy and efficiency of the proposed method.

Suggested Citation

  • Golambahri, Milad Zarei & Doostizadeh, Meysam & Khanabadi, Mojtaba, 2026. "Decentralized coordination of tie-line scheduling and its effects on real-time market clearing, considering virtual traders," Energy, Elsevier, vol. 345(C).
    • Handle: RePEc:eee:energy:v:345:y:2026:i:c:s0360544226001945
    DOI: 10.1016/j.energy.2026.140092
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