Economic Evaluation of FACTS for Congestion Management in Pool Markets

This paper deals with the congestion problem in the deregulated electricity market using an optimal power flow framework (OPF). The congestion management method considered in this paper is based on a constrained re-dispatch of generation schedule which are formed by the market. From the re-dispatch, the congestion management cost can be evaluated. The paper considers the installation and operation of the flexible alternating current transmission systems (FACTS) devices in the transmission network in order to alleviate congestion and minimize the amount of active power which has to be re-dispatched. A cost-benefit analysis to evaluate the economical justification of using FACTS for congestion management is proposed in the paper. The IEEE 14-bus system is used to simulate the market and illustrate the proposed method. The study results show that when FACTS devices are included in the network, the amount of re-dispatched power is greatly reduced resulting in an optimal operating point closer to that dictated by the market settlement and that FACTS is a viable option for congestion management, from a technical as well as economical point of view.