Socialwelfare Maximization under Congestion in Restructured Market

Abstract— When measured as a commodity, electric energy can be traded in a free market, synchronized only by the bids of customers and suppliers. With the beginning of deregulation in electricity sector, many Generation and Distribution Companies have come into the picture and change the vertically integrated organization of electric utilities. However, the combined transmission system is measured to be a natural monopoly so as to avoid the betrayal, innate problems of right-of-the-way, ecological issues and bulky asset for new structure, and compensation of the interconnected network. The interconnected transmission grid allows the efficient and consistent use of assets and reduces danger of power failures. In order to make certain a well competitive situation, an Independent System Operator (ISO) has invented as a generic operator, which defines rules and protocols for open and unbiased entrée of transmission services. The open access transmission framework results in more severe utilize of the transmission system with the market participants, and in turn may direct to the condition’s in which transmission network is not capable to contain all the pet transactions due to failure of some system constraints. This occurrence is commonly defined as “congestion”. The congestion in transmission system is one of the serious hindrances in front of perfect competition in deregulated environment. Thus, supervision of transmission congestion is one of the chief functions of ISO. The optimal allocation of FACTS device is explored for congestion management and social welfare maximization while minimizing the usage cost of FACTS devices.