Investment and Bidding Strategies for Optimal Transmission Management Dynamics: The Italian Case

This paper explores the allocation process of Financial Transmission Rights (FTRs) in Italian electricity market. FTRs are financial instruments allowing market participants to hedge against transmission congestion, also playing a critical role ensuring efficient use system. We present linear programming (LP) model that simulates process, taking into account capacity limits electric network when total revenue is considered as utility function. Obtained results highlight our solution allows us develop better investment and bidding strategies for optimal management dynamics. In particular, numerical simulations show good results, with an overall MAPE approximately 7%, indicating accurately predicts rights across network. Overall, provides insights inner workings FTR Italy, providing improved efficiency while increasing participants.