On transmission congestion management strategies and forecasting locational marginal prices in a deregulated competitive power market

To maximize both the social benefits of the customers and the efficiency of the transmission network system, the constraints of the transmission networks and the security level of the power system must be essentially controlled. In a competitive power market, congestion problem becomes an obstacle since it directly influences nodal pricing at various buses in the system. To keep a flat price profile at every node, dispatching of generating units and also load curtailment in a system may be required. Different pricing at every node or LMPs (Locational Marginal Price) are due to congestion of the network. The LMP at any node is the total cost of the incremental outputs of the marginal generators to deliver one unit of energy at that node without increasing the flow of the congested line. This paper presents a novel method to minimize total cost in respect of flow tariff, load costs, generator bids, zero congestion surplus and choosing properly the reference bus in a highly congested power system network. An improved LMP has been defined in this context which takes into account all of the above factors. The LMPs are calculated by incorporating Shift Factor (SF) based DC-Optimal power flow (DC-OPF) model. The proposed method has been applied in a four bus network and the results obtained have been found to be capable of eradicating the local market power monopoly in a system.