Flow-Tracing-Based Allocation of Congestion-Related Settlement Imbalances in Regional Electricity Markets with Priority-Based Implicit Transmission Rights

Abstract

In transitional electricity markets that operate without explicit financial or physical transmission rights but retain priority generation schedules and rigidly executed medium- and long-term (MLT) contracts, network congestion gives rise to settlement imbalance funds that are difficult to allocate fairly. This paper proposes an allocation framework that couples proportional-sharing power-flow tracing with priority-based implicit transmission rights (PBITRs). Flow tracing quantifies each transaction’s contribution to the realized flows on constrained lines, while the priority rank converts dispatch and contract-execution rules into a direction-dependent settlement weight. The clearing inputs are produced by a joint 24-period DC optimal power flow over a modified IEEE 30-bus system, and representative off-peak, peak, and flat periods are recalculated by AC optimal power flow to test the robustness of constrained-line identification, contribution ranking, and allocation shares. In the recalculated case study, the daily congestion-surplus pool is CNY 19,380 and the proposed method assigns 60.6% of it to the MLT A-to-C transaction that physically dominates the constrained corridor, compared with 21.1% under energy-proportional allocation. For the balancing congestion charge pool of CNY 42,492, the fund-specific responsibility set excludes the LMP-settled spot increment and the proposed method assigns 81.2% to the MLT A-to-C transaction. Across the three AC-OPF checks, the constrained-line sets coincide with the DC results at the 0.95 loading threshold, the transaction contribution rankings are identical, and the maximum DC-AC share differences are 1.01 percentage points for congestion surplus and 0.72 percentage points for balancing congestion charge. Sensitivity tests over the priority exponent and loading threshold show smooth and interpretable changes. The framework contributes an ex-post, settlement-neutral tool for markets that clear energy with LMPs before tradable transmission rights are introduced.