On the use of loss penalty factors for generation scheduling

In this paper, some practical issues regarding the computation of penalty factors and their application in generation scheduling are critically presented, along with some results corresponding to the Spanish transmission network and generating units. Firstly, modelling errors such as the use of an AC or DC network model and the localisation of the reference bus are discussed and quantified. Secondly, some practical considerations regarding the use of penalty factors in generation scheduling programs, such as the computation of the penalty factors exante or expost the commitment are presented.