Congestion cost allocation method in a pool model

The congestion cost caused by transmission capacities and voltage limit is an important issue in a competitive electricity market. To allocate the congestion cost equitably, the active constraints in a constrained dispatch and the sequence of these constraints should be considered. A multi-stage method is proposed which reflects the effects of both the active constraints and the sequence. In a multi-stage method, the types of congestion are analysed in order to consider the sequence, and the relationship between congestion and the active constraints is derived in a mathematical way. The case study shows that the proposed method can give more accurate and equitable signals to customers.