Management of congestion costs utilizing FACTS controllers in a bilateral electricity market environment

Due to the increased number of electricity market transactions and the high penetration of renewable power particularly wind power with intermittence nature on transmission networks, effective means for congestion management of transmission networks has become an increasingly important issue, particularly for transmission system operators (TSOs). Installations of FACTS controllers on transmission networks have been recognized as one of the cost-effective solutions for network congestion management. In this paper, a general two-step optimization methodology is first presented, which is capable of determining the optimal rating of a FACTS controller while relieving transmission system congestion via effective control of the flow of active and reactive power. Then a general sensitivity based three-step optimization methodology is further developed to include sensitivity analysis, which is capable of determining both the optimal location and rating of a FACTS controller effectively, for the congestion management of transmission networks under a bilateral electricity market environment. The proposed methods are illustrated with a 4-bus system and a modified JEEE 30-bus system.