Determining market clearing price using graphical analysis - impact of loss as a case study

Market clearing price (MCP) has been the prime operating function for a pool operator in energy trading scenario. Its main objective is to maximize the social welfare function where the society i.e. both the generating companies and the consumers are benefited and unbiased. Many researchers take stepped bid functions of both the generators and consumers as inputs for determining MCP (λ). But owing to reason of having less information and less realistic, quadratic bidding functions are preferred and a closed form solution scheme with and without loss have been developed. Gradient technique has been used for finding the mcp when losses are considered. All the above solution has been interpreted using graphical approach. The proposed approach has been tested on a 30 bus system and a 3 unit system. From the results, a conceptual understanding has been made and how various market conditions have an impact on the MCP is discussed. The results obtained are quite encouraging and useful for the present context of deregulation and restructuring of electricity market. MATLAB 7.0 has been used to carry out the simulation.