Congestion cost allocation in a pool-based electricity market

2012

In restructured electricity markets, an effective transmission pricing method is required to address transmission issues and to generate correct economic signals. Transmission line constraints can result in variations in energy prices throughout the network. These prices depend on generator bids, load levels and transmission network limitations. A congestion charge is incurred when the system is constrained by physical limits. Nodal pricing approach also called Locational Marginal Pricing (LMP) has become popular method in restructured power markets to address the congestion management. This paper presents LMP calculation with distributed loss model to remove the high mismatch at the slack bus which is a drawback in concentrated loss model. Both of these loss models used DCOPF solved with Genetic Algorithm (GA) and Linear Programming (LP) approach using Power World Simulator and have been applied for New England 39 bus system and the results are compared in each model. Both fixed an...

Advances in Science, Technology and Engineering Systems Journal, 2021

A R T I C L E I N F O A B S T R A C T Article history: Received: 25 December, 2020 Accepted: 05 February, 2021 Online: 25 February, 2021 The objective of this paper is to allocate transmission congestion cost to responsible generators using a novel method. Deregulation of the electrical power system leads to the compulsion of open access to the transmission system for all entities of the power system. There is a trend to utilize cheaper generators by all loads. This leads to a violation of the operational and physical constraints of transmission corridors connected to those generators. It is not possible to utilize cheaper generators all the time due to the operational and physical constraints of the transmission lines. Hence there is an increase in the cost of energy produced. This increase in energy cost is taken into account as total congestion cost. Allocation of total congestion costs among various entities is always a complex task. Here, generators liable for the increase in t...

Frontiers in Energy, 2012

The independent system operator (ISO) is a key element in the deregulated structure with one of the responsibilities of transmission congestion management (CM). The ISO opts market based solutions to manage congestion receiving bids from generation companies (GENCOs) as well as distribution companies (DISCOMs) to reschedule their generation and relocate demand. The nodal prices increases during the congestion hours and the demand response to nodal prices will be an effective tool for the control of congestion. In this paper, demand response-based CM has been proposed for a mix of pool and bilateral electricity market model. The linear bid curves have been considered for demand bids to respond to the congestion in the network. The bilateral demand has been obtained with minimum deviations in their preferred schedule. The impact of flexible alternating current transmission system (FACTS) devices viz static var compensator (SVC) and thyristor controlled series compensator (TCSC) has also been considered for demand management during congestion. Multi-line congestion cases have been considered to study the impact on demand response without and with FACTS devices. The proposed approach has been tested on the IEEE 24 bus test system.

2008

Basic concept of nodal price modeling in competitive market environment and some special considerations on its formulation are presented in this paper. Nodal prices represented by locational marginal prices (LMP) based settlement strategy is carried out in a deregulated market environment to establish the amount of money received by generation companies from system operator and paid to system operator from

2012

Wholesale electricity markets use different market designs to handle congestion in the transmission network. We compare nodal, zonal and discriminatory pricing in general networks with transmission constraints and loop flows. We conclude that in large games with many producers who are allowed to participate in the real-time market the three market designs result in the same efficient dispatch. However, zonal pricing with counter-trading results in additional payments to producers in exportconstrained nodes.

International Journal of Engineering, Science and Technology, 2016

Exhaustive research has been done for addressing the problems arising out of unbundling and restructuring of power market. The prime objective of every research was oriented towards managing the congestion in transmission corridors as well as providing cost effective production to utilities and low tariff energy to the end consumers. The key factors involved in the pricing of energy identified till now are network security, reliability, transmission losses allocation, technical, and social issues. This bibliographical survey was an attempt towards summarizing the recognized works and publications oriented towards pricing of electricity market. The purpose of this survey was to collect information from the previous literatures to help those, currently, working towards establishing a novel pricing scheme.Keywords: Congestion, Deregulation, Power market, Pricing, Restructuring, Unbundling

2004 International Conference on Power System Technology, 2004. PowerCon 2004., 2004

This paper presents a methodology based on the Kirchhoff's circuit laws, and transaction power flow analysis for unbundling and allocating transmission losses to the participants of a pool-based electricity markets. From a solved load flow and using the basic network equations and not make any simplifying assumptions a new, simples and transparent branch loss formula in injections currents terms of each bus or market participant is derived. It natural separation explicitly expresses the loss allocation at each system branch pertaining to individual bus or market participant. Then, the proposed methodology provides branch unbundling and nodal allocating of transmission losses among power market participants. Extensions and strategies considering unsubsidized loss allocation and loss allocation based on a predefined proportion are also included. Several important aspects related with the allocation fairness and transparency are illustrated and compared by numerical applications with a 4-bus system. Index Terms-Loss allocation, pool-based electricity markets, power flow, transmission losses, transmission open access.

IEEE Transactions on Power Systems, 2003

This paper compares two contrasting yet often used electricity market-clearing procedures: i) an auction-based algorithm including congestion management and transmission-loss cost allocation, and ii) an optimal power flow. The auction procedure produces a single-period unit commitment, and hence, can be compared directly to an optimal power flow solution. These algorithms are compared in terms of the economic efficiency of the solution attained, and in terms of cross-subsidies among generators and demands. The purpose of this comparison is to quantify the actual cost to market participants of using a simple, seemingly transparent procedure, such as an auction-based algorithm, versus an integrated but computationally intensive one, such as an optimal power flow.

2000 Power Engineering Society Summer Meeting (Cat. No.00CH37134), 2000

This paper is concerned with the interpmtion of the nodal prices in competitive electricity markets based on the Pool paradigm. Such prices are the byproducts of the optimization performed by the independent grid operator (IGO) to determine the centralized economic dispatch taking into account all transmission network and physicalloperations constraints. The IGO implicitly takes into account congestibn considations in determining the centralized economic dispatch. Under the Pool paradigm, a system marginal price no longer exists and each bus may have a different real and reactive power nodal price due to line losses and congestion avoidance considerations that can arise when the limit of one or more constraints is reached. The objective is to explore the economic signals provided by these prices and effectively apply them in the design of markets and the rules ofthe mud for these markets. The main focus of the paper is on the explicit evaluation of the impacts of the reactive load on the nodal real and reactive prices. We adopt a rather general model for reactive load model in which the mctive power at each node is represented as an a f i e function of the real power at that node, i.e., the reactive load is the sum of a constant and a constant power hctor component. This model includes as special cases the constant reactive load and the constant power factor load including the case of purely real load corresponding to unity power factor. We investigate the relationship between the real and reactive nodal prices and evaluate the impacts on them of the dual variables due to the various other physicaVoperations constraints in the system. We discuss the significance of the nodal price observations and the effective utilization in developing appropriate price signals in the Pool KeyworL: nodal prices, pool paradigm, congestion management, reactive load model. Paradigm.

The Energy Journal, 2015

Wholesale electricity markets use different market designs to handle congestion in the transmission network. We compare nodal, zonal and discriminatory pricing in general networks with transmission constraints and loop flows. We conclude that in large games with many producers and certain information, the three market designs result in the same efficient dispatch. However, zonal pricing with countertrading results in additional payments to producers in export-constrained nodes, which leads to inefficient investments in the long-run.