Economic Profit Maximization by Optimal Allocation and Sizing of WPG in Double Auction Competitive Electricity Market

Abstract

Liberalization of the electricity market systems have resulted in the introduction of Competitive Electricity Market (CEM). The recognition of CEM provides special consideration tothe development of Renewable Energy (RE)projects throughout the world. Only wind-based generation capacity accounted for around 75% of the total installed RE capacity all over the world. Wind energy is an indigenous and virtually unlimited source of electricity generation. The present work proposes an efficient model for determination of the optimal location and size of Wind Power Generation (WPG) under the competitive environment. The optimization algorithm has been formulated with an objective of social welfare maximization by minimizing the generation cost. The objective can be achieved by optimally placing WPGof optimal size in the system. To test the validity, the approach has been successfully applied on modified IEEE 14-bus modified test system.