Transmission Network Congestion in Deregulated Wholesale Electricity Market

Electricity market plays an important role in improving the economics of electrical power system. Transmission network is vital entity in open access deregulated wholesale electricity market. Whenever transmission network congestion occurs in electricity market, it divides the market in different zones and the trading price of electricity will no longer remains the same for the whole system. Bidding strategies in electricity market, where by changing the bid, market player changes the revenue of every participant of the market. This paper, after presenting a conceptual understanding of electricity market, gives performance analysis of electricity market for a small three bus system. How network congestion segregates the wholesale electricity market and forces the market to change its price from a common market clearing price to locational market price has also been illustratively demonstrated. Concept of strategic bidding by the participant of the market and its effect on the revenue generation of the players has been computed and analyzed with revising the cost function of one of the generator.