Congestion cost allocation and congestion indices for a competitive electricity market

This paper investigates the allocation of congestion cost and the index of congestion for a competitive electricity market. When congestion occurs, a congestion re-dispatch management is formulated as a minimization problem with an objective function in terms of the square sum of generation variation between the adjusted amount and the original bidden or contracted amount, or in terms of the bidden cost for re-dispatch. The flow contribution of each generation company to each congested line is computed by using the generation distribution factors and the allocation of congestion cost is based on the proportional sharing of flows on a congested line. A weighting approach is introduced to handle the case of multiple congested lines. The paper proposes two congestion indices: Average Congestion Index and Varying Congestion Index for identifying the congestion situation of the system. The simulation results of a modified IEEE 14-bus power system will provide some useful insights.