Optimization of ancillary services for system security: Sequential vs. simultaneous LMP calculation

A linear optimization problem is formulated to enable the independent system operator (ISO) to make least cost decisions for purchasing ancillary services. The ISO is responsible for adjusting the schedules resulting from the market clearing process to eliminate congestion [M. Gibescu and C.C. Liu, 1998]. Both the sequential and the simultaneous DC formulations for congestion management and ancillary services selection are optimized and compared as to their optimality. In a simultaneous approach the complex interplay of dynamic interactions which truly represents the actual operation is taken into consideration. Hence the combined optimization is more practical from the point of actual operation of the power system. It is shown in the results that optimality is achieved by simultaneously handling congestion and ancillary services. Load sensitivity studies are done at each of the load buses to see the system impact and predict the LMP at each load bus. A locational marginal price (LMP) simulator based on a generalized n-layer feed forward artificial neural network (ANN) which uses an error-backpropogation algorithm (LMS minimization) is developed to incorporate the inherent uncertainties in the market environment, load forecasting and other factors. It can also serve as a useful tool when there are missing inputs.