Risk-based constraint relaxation for security constrained economic dispatch

In the electricity markets of North America, security constrained economic dispatch (SCED) is widely implemented to make dispatch decision for day-ahead and real-time markets. Due to limitations on resource availability, control capability and facility limits, there exists some situations where the SCED model is infeasible. This paper first summarizes the industry-based approach in handling the infeasible SCED problem by using a penalty price, and it identifies the disadvantages of this approach. Then, a new method, using risk-based constraint relaxation, is proposed for overcoming the deficiencies of the industry approach. It constrains system risk and contingency risk, which quantifies the security level of the overall system and particular contingencies causing infeasibility, respectively. In this approach, we relax the thermal limit of individual circuits while simultaneously resisting risk increase; this approach avoids selection of penalty prices and thus reduces the tendency for LMPs to spike in certain regions of the network. A 6-bus network is used to illustrate its performance.