Minimizing Generation Cost and Neutralizing Market Power of GENCOs by Optimally locating Transformer Tap Ratio in Power Market

Abstract

The paper presents a strategy to access market power of generation companies (GENCOs) by cross entropy (CE) under different transformer tap ratio (TTR) in a competitive power market. Cross entropy is determined using locational marginal price (LMP) as a variable parameter. The objective of the paper is to determine an optimal location for TTR to minimize the overall generation cost of the system in a competitive power market. The relative entropy is also determined to determine the extra bits of probability distribution differs from the target probability distribution. The proposed methodology is a non-linear programming (NLP) which is solved by Matpower Interior Programming Solver (MIPS). In order to show the effectiveness, possible 36 scenarios are obtained for 6 GENCOs for accessing market power. IEEE 30 bus system is used to show the effectiveness of the proposed methodology.