Congestion management in deregulated electricity market using distributed generation

A congestion management approach in a deregulated electricity market using distributed generation (DG) has been proposed. Locational marginal price (LMP) has been utilized to find the optimal location of DG. Two different methods, highest LMP method and LMP difference method, are used to capture the potential locations for DG placement. Based on the priority of locations obtained from these two methods, the DG is placed to mitigate congestion. For selection of optimal size of DG, a method based on performance index for different ratings of DG is proposed and its effectiveness with the two methods of locating the DG is analysed. The performance of the proposed methodologies have been tested on IEEE 14-bus system.