Managing transmission system inadequacy using duals in restructured electricity markets

Abstract

Managing transmission system inadequacy using duals in restructured electricity markets

It is well known that congestion results in abnormally high prices and splits the market into similar nodal prices zones, thus giving opportunity to some of the generators to have captive load and make supernormal profits. Also, it impedes implementation of competitive electricity markets. It prevents scheduling low cost generators, consequently curtailing consumption due to high prices. Thus, congestion adversely affects the basic tenets of providing open access to market players. Congestion management, both in short term (operations) and long term (planning), requires information on transmission system adequacy and its impact on nodal prices which determine congestion rentals. It is necessary to understand the interplay of various control variables with the congestion management strategies.

We characterize the rate of change of Lagrangian multiplier associated with congested line to measure system inadequacy and devise congestion management strategy by establishing its relationship with various control variables. We use Direct Current Optimal Power Flow (DCOPF) approximation, a convex program, for our analysis. We show that Langrangian multiplier associated with transmission line capacity is a monotonically decreasing piecewise linear function of capacity limits. This measure helps in estimating the degree of inadequacy of the system. These findings are extended to the general class of separable convex programs. Emerging power electronics based technology like FACTS offer better control over the transmission system operation. FACTS help in alleviating system congestion, improving system stability and conducting efficient market operations. Strategic placement of FACTS devices is the key to derive its benefits. We devise an optimal placement strategy based on the sensitivity of Lagrangian multipliers with line impedances to alleviate transmission system congestion.

The theory proposed in this work is validated on a 5 bus and a 30 bus IEEE system and extended to the general class of separable convex programs. The tool to measure transmission system in adequacy, market-based congestion management strategy and algorithm for optimally locating FACTS devised in this dissertation would be very useful to system operators, regulators and policy makers to work towards a market solution for the electricity sector.