Allocation of security cost in a pure pool-based electricity market desgin on load contribution towards security problem

Abstract

Transmission congestion management in pool market model has become the main issue of the debate in competitive electricity markets over the years. This happened due to a lot of problems and associated issues which need serious attention from all participants; suppliers, pool operator and consumers. Previously the UK pool handled the cost of transmission constraints by an uplift charge and used a uniform price for transaction between suppliers and consumers. However, it is some kind of nondiscriminatory auction since it gives incorrect signals for sitting new power plants. Then, nodal pricing is introduced in pool market as another alternative to solve the security cost allocation. The approach is able to reflect the locational value in accounting for losses and congestion. Though, it contributes towards merchandizing surplus. In order to assure the security cost allocation satisfies the economic efficiency and provides fair prices, a study on this issue is being conducted. Several comparisons are made between uniform pricing, nodal pricing and game theory methods by testing them in pool system under different case studies. In order to realize it, MATLAB programs have been developed for three bus system and IEEE-14 bus system applications. The results obtained are analyzed for further improvements and recommendations.