"Cooperative game” inspired approach for multi-area power system: day ahead – intraday markets & security management taking advantage of grid flexibilities

This paper advocates for a progressive rethinking of the day-ahead/intra-day power system security management practice in the low-carbon energy transition era. As a starting point, the need for multi-TSO coordination in order to efficiently exploit the value of grid flexibility towards operating the low-carbon, multi-area power system securely and economically is established. On this basis, the core proposal of this paper is the adoption of a new approach to day-ahead/intra-day multi-area power system security management, inspired from the principles of cooperative game theory. The proposed approach relies on counterfactual analysis to evaluate the (positive and/or negative) impact of each distinctive control-area to the common security of the multi-area system, thus providing clear economic incentives to achieve the required coordination. This proposal is not a marginal approach and notably facilitates the integration of more detailed physical modeling (including the non-convexities of the power system) in the inter-TSO settlement of the multi-area interconnected system security management cost. The proposed framework allows some level of subsidiarity and the definition of hedging products to cover ex-post costs. Further from the blueprint of the proposed approach, the paper discusses prominent research and development pathways in order to progressively put such vision into practice.