Transmission congestion and its social effects

Transmission networks play a major role in the open access deregulated power market. The condition where overloads in transmission lines occur is called congestion and transmission congestion is a major problem that needs more studies. Congestion segregates the power market, weakens the competition mechanism, and invalidates the optimization of the generating resources in the whole network. Congestion also increases generating costs, makes the power market less efficient. In this paper, the transmission congestion is studied from a new point of view based on the social effects of transmission congestion. The effects are studied through the revenues, the wealth transfer, the merchandise surplus, the deadweight welfare loss and the market efficiency of the generation companies. Those effects are evaluated by a simple example. In order to optimize the generating resources and increase the market efficiency, the market operation department should pay attention to the transmission congestion, and eliminate the congestion through deploying various physical or financial means.