To attract more investments for developing smart transmission networks and increasing
their flexibility and efficiency, recently policies have been suggested which provide financial
incentives in transmission network investment. One of these policies is price biding for
incremental transmission capacity and transmission elements in power markets. According to
Federal Electricity Regulatory Committee, flowgate bidding is defined as allowing a line’s flow to
exceed its rated capacity for a short period of time for a set penalty, i.e., price. This paper
concentrates on the development of a comprehensive model for flowgate bidding and Dispatchable
Transmission Services (DTS) in security constraint unit commitment.
DTS and flowgate biddings are used during contingencies and steady state to determine
optimal required energy and reserve values. As the scale of the problem is large, the benders
decomposition algorithm is used to solve the problem. To investigate the efficiency of the
proposed strategy, IEEE 6 and 24 bus case tests are studied. According to the obtained results, this
strategy decreases energy and reserve marginal prices, as well as reliability cost. Furthermore, the
suggested plan is an incentive to the owners of transmission companies.