Simultaneous congestion management and cost allocation in a short-run market model

Abstract

This paper proposes a simultaneous approach to manage congestion, evaluate congestion cost, and to allocate this cost among consumers in a short-run market model. The proposed method consists of an iterative algorithm to search and apply a sequence of the best feasible bilateral power exchange among the generators that would optimally reduce and completely remove the congestion. The best exchanges are selected using sensitivity analysis and the AC load flow is used to apply the selected exchange on the system. Congestion cost is calculated using the change in generation cost and divided among the overloaded lines regarding the change in power flow of these lines, after applying the selected exchange. Following each exchange, the costs are allocated to consumers based on the generalized load distribution factors, which are calculated on the system operating condition. The effectiveness of the proposed approach is illustrated in two case studies on the standard IEEE 14 and 118-bus systems, and the results discussed and compared with the other methods in the paper.