Novel decentralized approach through optimal resource allocation for congestion management

Abstract

The paper proposed a novel decentralized approach for congestion management via Optimal Resource Allocation (ORA) for the forward markets. The available capacities of possible congested transmission lines are considered as commonly shared resources for bilateral and multilateral transactions in the market. Each transaction maximizes its profit using limited capacity of transmission line allocated by the ISO. Through the proposed decentralized optimization algorithms, the ISO searches the optimal allocation of the capacities of congested transmission lines to the individual transactions and finally the same market efficiency (social welfare) as centralized optimization is achieved. This decentralized approach is more suitable for power market environment since it does not require private and sensitive information submission from individual transactions to the ISO and the resource allocation decision is always feasible during iterations. The mathematical model, calculation procedure and relevant proof are presented. The computer test results from the IEEE 30 bus system show clearly the effectiveness of the approach and its consistency with the centralized optimization.