Congestion cost allocation in a pool-based electricity market

Abstract

This paper proposes a congestion cost allocation method for pool market structure. The congestion cost presented here is the cost of congestion relief. This paper begins with the discussion on the basic concept of pool market. Then congestion cost allocation methods for pool market; uniform pricing and nodal pricing are discussed. The weaknesses of the existing methods are highlighted. As a result, a proposed congestion cost allocation strategy for a pure-pool based electricity market is presented. Case studies using a simple 3-buses and IEEE-14 bus system are presented to test the proposed method. The old uniform pricing in the old England & Wales (E&W) pool market and nodal pricing are used to compare the proposed method.

Variously worldwide types of deregulated electricity markets and their respective transmission congestion management schemes

“…The PSP is the PPP plus the Uplifts. The following equations defined the relationships between those prices [6]:…”

“…It indicates electricity prices in the market will be identical for all participants without considering the locations [2]. The SO adopts the principle referred as "re-dispatch first, compensate later" to manage transmission congestion [6]. In dispatch stage, system operator collects all the generators' bids and ranks them from cheapest to higher prices until demand has been satisfied.…”

“…When transmission congestion occurred, the SO will re-dispatch the generators list, at the meantime ensuring the re-dispatch cost is the minimum. The algorithm of dispatch is shown as [6]:…”

“…If congestion occurs, an inequality constraint will be added [6]: (7) Where: is the power flow on the line k is the power flow up limitation of line k…”

“…Since different transaction curtailment has different power flow sensitivities to any line flow, curtail one certain transaction is much more effective than other transaction curtailment [6]. The SO is focus on searching such bilateral transaction to avoid waste curtailment.…”