1. The joint optimization should maximize the total surplus, if that is what you mean by "best solution". 2. I do not think this is true. It should be possible to come up with a counter-example. 3. How are you computing congestion rents? Total revenue from loads minus total payout to generators? My interpretation of this number is that it is a measure of the potential for increased benefits that might be realized by enhancing the transmission system (increasing line capacities and/or reducing losses). I'm not an economist, but I believe it is part of the total surplus of the system.
-- Ray Zimmerman Senior Research Associate 419A Warren Hall, Cornell University, Ithaca, NY 14853 phone: (607) 255-9645 On Oct 7, 2011, at 3:11 PM, Santiago Chamba wrote: > Dear Friends , > > I have some questions related to the benefit maximization in a regional > market. I hope that you are interested in this topic. > > I have run two system individually and have calculated the load benefits, > generation benefits and congestion rent for each system. Later, I run the > two systems together and calculated the benefits load, benefits generation > and the new congestion rent. > > When, I run the systems together, the total cost are minimized compare to the > sum of the two cost functions for separate. Then, I calculated the benefit > for each system, for example, for a exporter system are decreases the load > benefit, increases the generation benefits because to the price increase. The > sum of these quantities is minor than the sum of the load benefits plus > generation benefits without interconection. But, increases the congestion > rent inside of the system. > > My question are: > > 1. The best solution for exchanges between systems is to perform a joint > optimization?. > 2. The joint optimization ensures that the benefits of each system is equal > to or greater than the benefit of the system whit individually optimized. How > can I prove it analytically? > 3. What is the economic interpretation of the increases congestion rent? This > amount is a benefit for the system? > > Thanks for your help.
