Hierarchical Multiobjective Optimization for Independent System Operators (ISOs) in Electricity Markets

The creation of competitive electricity markets has increased the complexity of the economics of system operation. Independent system operators (ISOs) perform optimizations based on a market-driven objective function. However, there may be other objectives that the ISO wishes to consider. These objectives are called secondary objectives, as they are dominated by the economic objective. In this paper, a hierarchical multiobjective (HMO) optimization is developed that, through coordinated control of network devices such as phase shifting transformers and series flexible ac transmission systems (FACTS), allows the market objective to be optimized in a global sense, while the secondary objectives are locally optimized. The method is applied to a modified IEEE 30-bus system incorporating a wide-area impact index-minimizing secondary objective. Formulated in this paper, the wide-area impact index accurately measures the effects of parallel flow over multiple lines in a region. Comparisons are made between the HMO´s performance with other single and multiple objective optimizations and between the wide-area impact index and traditional parallel flow calculations