Economics of FACTS integration into the liberalised European power system

In spite of a large bibliography available concerning FACTS (flexible AC transmission system) analysis and implementation, a very limited amount of contributions in open literature investigate the economics of these devices. The present paper focuses on the economic implications deriving from the enhancement of transmission transfer capacity by utilizing FACTS devices in liberalised power systems. Particularly, attention has been paid to the UPFC (unified power flow controller), which has been modelled in an original way for DC load flow studies and inserted in an optimisation algorithm for market solving. Test cases in a European regional power market are also presented.