An Optimal Pricing Scheme in Electricity Markets Considering Voltage Security Cost

Optimal pricing in electricity markets has emerged as a multifunctional task for the grid managers as well as a major concern for the electricity providers and users. In this paper an optimal power flow problem is developed to take into account wider dimensions of the task by linking short-term and long-term performances of power systems via security pricing. The emphasis here is on the voltage stability phenomena as a security cost. The stochastic nature of power systems is taken into account to overcome the conservativeness associated with the severest single contingency approaches. This is done by inserting the approximated discrete processed risk data into the problem as a spline function to avoid lengthy iterative solutions. An effective combined offline and online procedure is then proposed to solve the optimization problem via the interior point method, preserving both the swiftness and precision of the solution. The effectiveness of the proposed problem definition and solution is confirmed through calculating locational marginal prices for a benchmark power system.