Influence of Distributed Generation on Congestion and LMP in Competitive Electricity Market

Authors: Durga Gautam, Mithulananthan Nadarajah

Abstract:

This paper presents the influence of distributed generation (DG) on congestion and locational marginal price (LMP) in an optimal power flow (OPF) based wholesale electricity market. The problem of optimal placement to manage congestion and reduce LMP is formulated for the objective of social welfare maximization. From competitive electricity market standpoint, DGs have great value when they reduce load in particular locations and at particular times when feeders are heavily loaded. The paper lies on the groundwork that solution to optimal mix of generation and transmission resources can be achieved by addressing congestion and corresponding LMP. Obtained as lagrangian multiplier associated with active power flow equation for each node, LMP gives the short run marginal cost (SRMC) of electricity. Specific grid locations are examined to study the influence of DG penetration on congestion and corresponding shadow prices. The influence of DG on congestion and locational marginal prices has been demonstrated in a modified IEEE 14 bus test system.

Keywords: Congestion management, distributed generation, electricity market, locational marginal price, optimal power flow, social welfare.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1080354

References:

[1] IEA Publication, "Distributed Generation in Liberalized Electricity Market", 2002. Available: http://www.iea.org/dbtw-wpd/textbase/nppdf/free/2000/ distributed2002.pdf
[2] G. Pepermans, J. Driesen, D. Haeseldonckx, R. Belmans, W. D-haeseleer, "Distributed generation: definition, benefits and issues", Energy Policy, vol. 33, pp. 787-798, 2005. Available: http://www.kuleuven.ac.be/ei/Public/publications/EIWP05-03.pdf
[3] J. Chandley, S. Harvey and W. W. Hogan, "Congestion Management in California", August 31, 2000. Available: http://www.lecg.com/website%5Chome.nsf/OpenPage/Energy- ResearchPapersTestimony/$FILE/Congestion%20Mgmt%20in%20CA %208-31-00.pdf
[4] W. L. Massey, "FERC Policy Will Nourish Distributed Resources", Distributed Resources Conference and Exhibition Electric Power Research Institute, Dallas, Texas March 20, 2002. Available: http://www.ferc.gov/press-room/sp-archives/2002/03-20-02-massey.pdf
[5] N. Acharya, N. Mithulananthan, "Locating series FACTS devices for congestion management in deregulated electricity markets," Electric Power Systems Research, vol. 77, pp. 352-360, 2007.
[6] H. Singh, S. Hao, A. Papalexopoulos, "Transmission Congestion Management in Competitive Electricity Markets", IEEE Trans. on Power Systems, vol. 13, no. 2, May 1998
[7] S.N. Singh, A.K. David, "Optimal location of FACTS devices for congestion management," Electric Power System Research, vol. 58, pp. 71-79, 2001.
[8] G. Hamound and I. Bradley, "Assessment of Transmission Congestion Cost and Locational Marginal Pricing in a Competitive Electricity Market", IEEE Trans. on Power Systems, vol.19, no.2, pp.769-775, May 2004
[9] J. Liu, M. M. A. Salama, R. R. Mansour, "Identify the Impact of Distributed Resources on Congestion Management," IEEE Trans. on Power Delivery, vol.20, no.3, July 2005.
[10] J.W. Bialek, "Elimination of merchandise surplus due to spot pricing of electricity," in IEE Proceedings Generation, Transmission & Distribution, vol. 144, no. 5, Sept. 1997.
[11] S. Tao and G. Gross, "A Congestion Management Allocation Mechanism for Multiple Transaction Networks", IEEE Trans. on Power Systems, vol.17, no.3, pp.826-833, Aug. 2002.
[12] S. Hunt, "Making Competition Work in Electricity", John Wiley & Sons, Inc., 2002.
[13] F. C. Schweppe, M.l C. Caramanis, R. D. Tabors and R. E. Bohn,"Spot Pricing of Electricity", Kulwer Academic Publishers, 1988
[14] T. W. Gedra, “On Transmission Congestion and Pricing,” IEEE Trans. on Power Systems, vol. 14, no. 1, pp. 241-248, Feb. 1999.
[15] Power System Test Case Archive.(Online). Available: http://www.ee.washington.edu/research/pstca/pf14/pg_tca14bus.htm
[16] D. Gautam and N. Mithulananthan, “Locating Distributed Generator in the LMP-based Electricity Market for Social Welfare Maximization,” Electric Power Components and System, vol. 35, no. 5, pp. 489-503, May 2007.