Analysis of Coordinated Multilateral Trades

A new operating paradigm is still needed for the power industry in order to achieve a workable deregulated market. The two main proposals, namely the Bilateral and the Poolco models, even though their original intents were to promote efficiency in a deregulated industry, in order to be workable need a powerful centralized organization. They consequently end up operating in the same way as the regulated industry. The coordinated multilateral trading model lets the suppliers and consumers make a profit on their own while the Power System Operator only intervenes if the security of the power network is threatened. The PSO gives sufficient information about the status of the power network so that the brokers can arrange trades without endangering the security of the network. Moreover the economic data of the participants is private, thus encouraging economic competition in a free market. It is shown that the process of building such trades leads to an efficient use of the power network, i.e. maximize the social welfare. A three bus example is demonstrated.