Name of Faculty: Gauri Shankar Sharma Subject: RPS Semester: V Session: 2021-22 (Odd Sem) Branch: EE Batch: A Unit: V Date of Submission: 11/11/21

MODERN INSTITUTE OF TECHNOLOGY AND RESEARCH CENTRE, ALWAR
Name of Faculty: Gauri Shankar Sharma
Subject: RPS
Semester: V Session: 2021-22 (Odd Sem)
Branch: EE Batch: A
Unit:IV Date of Submission: 11/11/21
Page Total
Topics Covered
No. Page
Definition of congestion management and Reason for
22 104-108 5
transfer capability limitation
23 Classification of congestion management mechanisms 109-111 3
24 Calculation of available transfer capability (ATC) 112-114 3
25 ATC calculation using dc and ac model 115-118 4
26 Non-market methods of congestion management 119-121 3
27 Price area congestion management 122-127 6
28 Capacity alleviation methods 128-131 4

MODERN INSTITUTE OF TECHNOLOGY AND RESEARCH CENTRE, ALWAR
Name of Faculty: Gauri Shankar Sharma
Subject: RPS
Semester: V Session: 2021-22 (Odd Sem)
Branch: EE Batch: A
Unit:IV Date of Submission: 11/11/21
Plagiarism
Topics Covered
Definition of congestion management and Reason for

22 56%
transfer capability limitation
23 Classification of congestion management mechanisms 48%
24 Calculation of available transfer capability (ATC) 58%
25 ATC calculation using dc and ac model 42%
26 Non-market methods of congestion management 47%
27 Price area congestion management 44%
28 Capacity alleviation methods 55%
Average: 52%
Unit-5 EE-5 Sem. Restructured Power System
UNIT-5 (TRANSMISSON CONGESTION MANAGEMENT)
LECTURE NO:-22
Definition of congestion management and Reason for transfer

capability limitation
Congestion management in a multi-buyer/ multi-seller system is one of the most involved
tasks if it has to have a market based solution with economic efficiency. In a vertically
integrated utility structure, activities such as generation, transmission and distribution are
within direct control of a central agency or a single utility. Generation is dispatched in order
to achieve the system least cost operation. Along with this, the optimal dispatch solution
using security constrained economic dispatch eliminates the possible occurrence of
congestion. This effectively means that generations are dispatched such that the power flow
limits on the transmission lines are not exceeded.
One should not expect things to be as simple in a deregulated power environment. In a

deregulated environment, every buyer wants to buy power from the cheapest generator
available, irrespective of relative geographical location of buyer and seller. As a
consequence of the, the transmission corridors evacuating the power of cheaper generators
would get overloaded if all such transactions are approved. Congestion is then said to have
occurred when system operator finds that all the transactions cannot be allowed on account
of overload on the transmission network. Congestion management is a mechanism to
prioritize the transactions and commit to such a schedule which would not overload the
network. Despite these measures, congestion can still occur in real time following a forced
outage of transmission line. The system operator then handles this situation by means of real
time congestion management. Thus, congestion management involves precautionary as well
as remedial action on system operator’s part, as follows:
 Allow only that set of transactions which, taken together, keeps the transmission
system within limits.
 Even if this care is taken, in real time, the transmission corridors may get overloaded
due to unscheduled flows. The system operator has to take some remedial action
104
Gauri Shankar Sharma
Definition of Congestion
Whenever the physical or operational constraints in a transmission network become active,

the system is said to be in a state of congestion. The possible limits that may be hit in case
of congestion are: line thermal limits, transformer emergency ratings, bus voltage limits,
transient or oscillatory stability, etc. These limits constrain the amount of electric power that
can be transmitted between two locations through a transmission network. Flows should not
be allowed to increase to levels where a contingency would cause the network to collapse
because of voltage instability, etc.
The peculiar characteristics associated with electrical power prevent its direct comparison
with other marketable commodities. First, electrical energy can not be stored in large
chunks. In other words, the demand of electric power has to be satisfied on a real time basis.
Due to other peculiarities, the flexibility of directly routing this commodity through a
desired path is very limited. The flow of electric current obeys laws of physics rather than
the wish of traders or operators. Thus, the system operator has to decide upon such a pattern
of injections and take-offs, that no constraint is violated.
How Transfer capability is limited?
Congestion, as used in deregulation parlance, generally refers to a transmission line hitting

its limit. The ability of interconnected transmission networks to reliably transfer electric
power may be limited by the physical and electrical characteristics of the systems including
any or more of the following:
 Thermal Limits: Thermal limits establish the maximum amount of electrical current
that a transmission line or electrical facility can conduct over a specified time period
before it sustains permanent damage by overheating.
 Voltage Limits: System voltages and changes in voltages must be maintained within
the range of acceptable minimum and maximum limits. The lower voltage limits
determine the maximum amount of electric power that can be transferred.
105
 Stability Limits: The transmission network must be capable of surviving

disturbances through the transient and dynamic time periods (from milliseconds to
several minutes, respectively). Immediately following a system disturbance,
generators begin to oscillate relative to each other, causing fluctuations in system
frequency, line loadings, and system voltages. For the system to be stable, the
oscillations must diminish as the electric system attains a new stable operating point.
The line loadings prior to the disturbance should be at such a level that its tripping
does not cause system-wide dynamic instability.
 The limiting condition on some portions of the transmission network can shift
among thermal, voltage, and stability limits as the network operating conditions
change over time. For example, for a short line, the line loading limit is dominated
by its thermal limit. On the other hand, for a long line, stability limit is the main
concern. Such differing criteria further lead to complexities while determining
transfer capability limits.
Importance of congestion management in the deregulated environment
If the network power carrying capacity is infinite and if there are ample resources to keep
the system variables within limits, the most efficient generation dispatch will correspond to
the least cost operation. Kirchoff‟s laws combined with the magnitude and location of the
generations and loads, the line impedances and the network topology determine the flows in
each line. In real life, however, the power carrying capacity of a line is limited by various
limits as explained earlier. These power system security constraints may therefore
necessitate a change in the generator schedules away from the most efficient dispatch. In the
traditional vertically integrated utility environment, the generation patterns are fairly stable.
From a short term perspective, the system operator may have to deviate from the efficient
dispatch in order to keep line flows within limits. However, the financial implications of
such re-dispatch do not surface because the monopolist can easily socialize these costs
amongst the various participants, which in turn, are under his direct control. From planning
perspective also, a definite approach can be adopted for network augmentation.
106
However, in deregulated structures, with generating companies competing in an open

transmission access environment, the generation / flow patterns can change drastically over
small time periods with the market forces. In such situations, it becomes necessary to have a
congestion management scheme in place to ensure that the system stays secure. However,
being a competitive environment, the re-dispatch will have direct financial implications
affecting most of the market players, creating a set of winners and losers. Moreover, the
congestion bottlenecks would encourage some strategic players to exploit the situation.
Effects of Congestion
The network congestion essentially leads to out-of-merit dispatch. The main results of these
can be stated as follows:
 Market Inefficiency: Market efficiency, in the short term, refers to a market outcome
that maximizes the sum of the producer surplus and consumer surplus, which is
generally known as social welfare. With respect to generation, market efficiency will
result when the most cost-effective generation resources are used to serve the load.
The difference in social welfare between a perfect market and a real market is a
measure of the efficiency of the real market. The effect of transmission congestion is
to create market inefficiency.
 Market Power: If the generator can successfully increase its profits by strategic
bidding or by any means other than lowering its costs, it is said to have market
power. Imagine a two area system with cheaper generation in area 1 and relatively
costlier generation in area 2. Buyers in both the areas would prefer the generation in
area 1 and eventually the tie-lines between the two areas would start operating at full
capacity such that no further power transfer from area 1 to 2 is possible. The sellers
in area 2 are then said to possess market power. By exercising market power, these
sellers can charge higher price to buyers if the loads are inelastic. Thus, congestion
may lead to market power which ultimately results in market inefficiency.
In multi-seller / multi-buyer environment, the operator has to look after some additional
issues which crop up due to congestion. For example, in a centralized dispatch structure, the
system operator changes schedules of generators by raising generation of some while
decreasing that of others. The operator compensates the parties who were asked to generate
107
more by paying them for their additional power production and giving lost opportunity
payments to parties who were ordered to step down. The operator has to share additional
workload of commercial settlements arising due to network constraints which, otherwise,
would have been absent.
One important thing to be noted is that creation of market inefficiency arising due to
congestion in a perfectly competitive market acts as an economic signal for network
reinforcement. The market design should be such that the players are made to take a clue
from these signals so as to reinforce the network, thus mitigating market inefficiency.
References:
1. https://www.pserc.cornell.edu/tcc/tutorial/TCC_Tutorial.pdf
2. https://iopscience.iop.org/article/10.1088/1755-1315/233/3/032025
3. https://ieeexplore.ieee.org/document/6698716/
108
LECTURE NO:-23
CLASSIFICATION OF CONGESTION MANAGEMENT

MECHANISMS
Desired Features of Congestion Management Schemes
Economic Efficiency: Congestion management should minimize its intervention into a

competitive market. In other words, it should achieve system security, forgoing as little
social welfare as possible. The scheme should lead to both, short term and long term
efficiency. The short term efficiency is associated with generator dispatch, while long term
efficiency pertains to investments in new transmission and generation facilities
 Non discriminative: Each market participant should be treated equally. For this, the
network operator should be independent of market parties and he should not derive
any kind of benefit from occurrence of congestion. Otherwise it provides perverse
signals for network expansion.
 Be transparent: The implementation should be well defined and transparent for all
participants.
 Be robust: Congestion management scheme should be robust with respect to
strategic manipulation by the market entities. This again refers back to principle of
economic efficiency
The congestion management schemes are strongly coupled with the overall market design.
Efficient allocation of scarce transmission capacity to the desired participants of the market
is one of the main objectives of congestion management schemes. Thus, distinction among
them can be made based on market based congestion management methods and other
methods. Market-based solutions to congestion are deemed fairer as they contribute better to
economic efficiency than other methods. Methods other than market based make use of
some criteria to allocate the transmission capacity. These methods are supposed to introduce
some kind of arbitrariness as they do not contribute towards efficient pricing of congested
link. Classification of congestion management schemes on these lines is shown in Table 4.1.
109
Table 5.1: Classification of congestion management schemes
Before moving on to see details of these methods, we first see various phases of the entire
process of congestion management on timeline. This is explained with the help of Figure
As the transactions keep on committing, the system operator continuously
updates the available transfer capability between various regions / areas / nodes in
the system. This becomes essential because as the day-ahead (or the spot) market
approaches, the operator should have knowledge about the network capacity left for
settling the market. The transmission network capacity allocation in a coordinated
market may take an explicit or implicit form. In other words, there can be a separate
market for transmission capacity reservation or it may be integrated with the
coordinated market.
Even after capacity allocation, the real time flows may lead to violation of transmission
capacities. In order to relieve congestion during real time, congestion alleviation methods
are employed.
110
Figure 4.1: Phases of network access with respect to congestion
Out of several congestion management techniques listed above, following are exclusively
termed as congestion alleviation methods:
 Re-dispatch
 Counter Trade
 Curtailment
It should be noted that the capacity allocation methods usually allocate the transmission
capacity in ex-ante manner before physical delivery of energy. On the other hand,
congestion alleviation methods are termed as remedial actions. The procedure of capacity
allocation starts with the calculation of Available Transfer Capability
References:
111
LECTURE NO:-24
CALCULATION OF AVAILABLE TRANSFER CAPABILITY

(ATC)
In a vertically integrated market, the inter-area tie lines are designed only to address the
reliability, system security and system restoration purposes. This integration of various
systems becomes a market need in the deregulated era. Thus, inter-area tie lines become
means of bulk power transfers on a regular basis from sources of cheap generation to loads.
In other words, due to deregulation, the paradigm of grid integration has shifted from
regional self-sufficiency to optimal utilization of resources across large geographical areas.
Thus, it becomes imperative on the part of system operator to quantify the Available
Transfer Capability (ATC) of the network and allocate the same to the market participants
in an efficient manner.
Generally, the non-market based methods rely upon the information about the ATC in order
to take a decision while allowing the next set of transactions. Thus, calculation of ATC
gains a lot of importance under such market structures. In the early days of deregulation in
USA, the ATC values for the next hour and for each hour into the future would be placed on
a website known as the open access same-time information system (OASIS), to be operated
by the ISO. Anyone wishing to send a power transaction on the ISO's transmission system
would access OASIS web pages and use the ATC information available there to determine
if the transmission system could accommodate the transaction, and to reserve the necessary
transmission service.
Definition of Various Terms
Available Transfer Capability (ATC)
It is a measure of the transfer capability remaining in the physical transmission network for
further commercial activity over and above already committed uses. Mathematically, ATC
is defined as the Total Transfer Capability (TTC) less the Transmission Reliability Margin
(TRM), less the sum of existing transmission commitments (which includes retail customer
service) and the Capacity Benefit Margin (CBM
112
ATC = TTC - TRM - Existing Transmission Commitments (including CBM)
Total Transfer Capability (TTC)
It is defined as the amount of electric power that can be transferred over the interconnected
transmission network in a reliable manner while meeting all of the specific set of defined
pre and post contingency system conditions.
Transmission Reliability Margin (TRM)
It is defined as the amount of transmission transfer capability necessary to ensure that the
interconnected transmission network is secure under a reasonable range of uncertainties in
system conditions.
Capacity Benefit Margin (CBM)
It is defined as the amount of transmission transfer capability reserved by load serving

entities to ensure that the interconnected systems do meet generation reliability
requirements.
The NERC report [24] brings out the difference between “transfer capability” and
“transmission capacity”. According to this report, the „capacity' specifically mentions the
rating of the equipment, for example, the ampacity of the conductor. On the other hand, the
„capability' depends upon generation, customer demand and the conditions in a transmission
system for the given time period. Thus, the „capacity' of a circuit may not change much
from time to time. However, the „capability' always changes with the time by virtue of
changes in the system condition.
As mentioned earlier, ability of the network system to reliably deliver power is limited by
physical and electrical characteristics of the system. These limits are: Thermal, Voltage and
Stability. During the varying conditions of power system, one of these limits plays a major
role in deciding the transfer capability. Determining which limit is binding during a
particular time is a challenging task and makes computation of ATC an involved task.
Many methods have been suggested to calculate the ATC. The methods differ on the basis
of the power flow model being employed, the system aspects considered, the compelling
113
limits under consideration and some other factors. However, a broad way of classifying
methods is based on the type of limit considered, i.e., Thermal limit, Voltage limit or the
Angular stability limit. The DC power flow methods take into consideration only the
thermal limits. The AC Optimal power flow (OPF) methods consider thermal as well as
voltage limits. Then, there is another version called Continuation power flow method (CPF).
It considers a series of power system solutions to be solved and tested for limits. The
amount of transfer is gradually increased from the base case until a binding limit is
encountered. Ejebe et al. [31] have described a method based on continuation power flow,
incorporating limits of reactive power flows, voltage limits, as well as voltage collapse and
line flow limits. Stability constrained methods require transient studies to be carried over a
case developed with anticipated scenario. Christie et al. [1] have proposed a method based
on DC power transfer distribution factors (PTDF). This utilizes DC load flow based
formulation, and computation of simultaneous ATC has also been considered using an
optimization based approach.
References:
114
LECTURE NO: - 25
ATC CALCULATION USING DC AND AC MODEL

One way of calculating ATC from node A to node B is to use DC load flow repetitively by
increasing the amount of transaction until a limit of any of the corridor is reached. However,
this is computationally inefficient. Instead, the Power Transfer Distribution Factor (PTDF)
can be used to calculate the maximum allowable flow for a given pair of injection and take-
off points. It is also necessary to consider the effects of contingencies like line outages. This
can be achieved using Line Outage Distribution Factor (LODF). Let us first see the details
of DC load flow model.
DC Load Flow Model
Following are the assumptions when DC model is employed instead of AC model:
 Voltage magnitudes are constant.

 Only angles of complex bus voltages vary.
 The variation in angle is small.
 Transmission lines are lossless.
These assumptions create a model that is a reasonable first approximation for the real power
system, which is only slightly nonlinear in normal steady state operation. The model has
advantages for speed of computation, and also has some useful properties like linearity and
superposition.
With these assumptions, power flows over transmission lines connecting bus i and bus j is
given as:
With these assumptions, power flows over transmission lines connecting bus i and bus j is given
Where,
line inductive reactance in per unit
Phase angle at bus l
115
Phase angle at bus m
The total power flowing into the bus i, Pi, is the algebraic sum of generation and load at the
bus and is called a bus power injection. Thus,
This can be expressed in a matrix form as:
Where, the elements of the susceptance matrix BX are functions of line reactances . One
node is assigned as a reference node by making its angle zero and deleting corresponding
row and column in matrix. Thus,
............................................................................................................................(4.4)
The dimension of obtained is . Let us augment it by adding zero column

and row corresponding to reference bus. The angles in equation 4.3 can be found out as
.................................................................................................................................(
4.5)
Thus, power flow over line lm can be found out using equation 4.1.
Power Transfer Distribution Factor (PTDF)
From the power transfer point of view, a transaction is a specific amount of power that is
injected into the system at one bus by a generator and drawn at another bus by a load. The
116
coefficient of linear relationship between the amount of a transaction and flow on a line is
represented by PTDF. It is also called sensitivity because it relates the amount of one
change - transaction amount - to another change - line power flow.
PTDF is the fraction of amount of a transaction from one bus to another that flows over a
transmission line. is the fraction of a transaction from bus i to bus j that flows over
a transmission line connecting buses l and m.
.....................................................................................................................(4.6)
Calculation of PTDF Using DC Model
Suppose there exists only one transaction in the system. Let the transaction be of 1 MW from bus
i to bus j. Then, the corresponding entries in equation 4.7 will be: and . All other
entries will be zero. From equation 4.5, we get
..........................................................................................................................(4.7)
Similarly,
...........................................................................................................................(4.8)
Thus,
............................................................................................................................(4.9)
117
.......................................................................................................................(4.10)
Using equations 4.9, 4.10 and 4.1, the PTDF can be calculated as
...................................................................................................(4.11)
Reactance of transmission line connecting buses l and m
Entry lth row and ith column of the bus reactance matrix X
The change in line flow associated with a new transaction is then
...................................................................................................................(4.12)
Where,
l and m buses at the ends of the line being monitored
i and j from and to bus numbers for the proposed new transactions
New transaction MW amount
References:
118
LECTURE NO:-26
NON-MARKET METHODS OF CONGETSION

MANAGEMENT
The non-market methods of congestion management essentially refer to network capacity
allocation based on some pre-defined set of rules that neglect the ability or the willingness
of a player to pay for the transmission capacity. For such schemes and also for explicit
market based methods, the system operator is required to know the capacity remaining with
the grid, after accommodating the transactions which is nothing but ATC.
Capacity Allocation on First Come First Serve Basis

There are some systems in which the bilateral contracts are awarded for transmission
network access on first come first served basis. The calculation of ATC facilitates a
participant to determine whether there is enough capacity available for him to do the
transaction between two nodes of concern. If enough capacity is left on the network so as to
make a transaction, the participant books his transaction with the system operator. After
this, the system operator updates the ATC. The next transaction in line again checks
whether there is enough corridor capacity available to do the transaction. The drawback
associated with this mechanism is that the willingness to pay for transmission usage is not
taken into account. Those participants with high valuation of transmission network may not
get scheduled.
Capacity Allocation based on Pro-rata Methods
Various norms can be set to assign network capacities on pro-rata basis. The capacities can
be allocated on average load or generation, or percentage of long term transactions or
maximum demand, etc. In other words, all participants receive an equal percentage of the
total amount of capacity they apply for. These norms are used for capacity allocation as well
as for congestion alleviation, which is used in real time. This scheme also has same
limitations as in first come first served method.
Another limitation of this method is possible strategic behavior of the market participants.
The system of pro-rata distribution of capacity can lead to market parties applying for
119
transmission capacity much more than what they want, knowing that the actual amount that
they will receive is physically limited.
Capacity Allocation based on Type of Contract
In this type of capacity allocation, network capacity is allocated to a particular type of

transactions. For example, capacity is first allocated to firm or long term transaction and in
the rest of capacity, maximum possible number of short term transactions are
accommodated. If in the real time operation, the re-dispatching of injections is required to
be done, the short term transactions are curtailed first ahead of long term or firm
transactions.
EXPLICIT AUCTIONING
The principle of explicit auctioning is based on selling the available capacity of the tie line
to the highest bidder through auction. This is nothing but auctioning of the tie line capacity.
The explicit auctioning separates the energy market from transmission capacity market.
This approach is commonly used in Europe for capacity allocation at several borders. In
explicit auctioning, the system operators (or the TSO in Europe) determine ex-ante, the
available transmission capacity (ATC) considering security analysis, accepts bids from
potential buyers and allocates the capacity to the ones that value it most. Thus, explicit
auctioning is a market based concept, which provides economic signals. Thus, with perfect
foresight, bidders for transmission capacity would predict the electricity market outcome
with efficient use of transmission.
A limitation of this mechanism is the increased complexity which may complicate trading
activities of market participants. Another limitation is that the mechanism fails to account
for parallel flows in meshed networks. In this context, a new method has been proposed
called coordinated auctioning.
Coordinated Auctioning
120
The coordinated auctioning splits the markets into energy market and transmission capacity
market. Participants have to ensure that they own sufficient transmission rights to conclude
their energy exchanges. However, coordinated auctioning tries to overcome problems
associated with explicit auctioning by accounting for the effects of loop flows in the
network. A central auctioneer is introduced who manages capacity allocation at all borders
included in the Internal European Market (IEM). For coordinated auctioning, three steps are
necessary:
 Each system operator informs the central auctioneer about the available transmission
capability.
 Market participants submit their bids to the central auctioneer.
 The auctioneer allocates transmission capacity using a model similar to nodal
pricing.
Market participants may value their willingness to pay for transmission rights by comparing
the different zonal prices. Hence, rational bidders for transmission rights will submit bids
equal to the zonal difference in energy prices, as savings for cheaper energy are traded off
against the transmission costs. With perfect foresight and all information available, a
coordinated auction will lead to the same allocation as the nodal pricing approach, which in
turn is considered as an economically efficient decision.
References:
121
LECTURE NO:-27
PRICE AREA CONGESTION MANAGEMENT
This is a simplified version of the inter-zonal and intra-zonal congestion management

scheme. This method consists of splitting a power exchange into geographical bid areas
with limited capacities of exchange. When congestion is predicted, the system operator
declares that the system is split into areas at predicted congestion bottlenecks. Spot market
bidders must submit separate bids for each price area in which they have generation or load.
If no congestion occurs during market settlements, the market will settle at one price, which
will be the same as if no price areas existed. If congestion does occur, price areas are
separately settled at prices that satisfy transmission constraints. Areas with excess cheaper
generation will have lower prices, and areas with excess load - higher prices. Market income
from this price difference is paid to the SO and he further uses it for grid enhancement.
Bilateral contracts that span price areas must purchase the load‟s energy in its price area in
order to account for the contribution to congestion and to expose the contract to the financial
consequences of congestion.
Algorithm for Price Area Congestion Management Scheme
Resolving congestion management by market splitting is a step by step process. Algorithm 1

gives a step by step procedure for price area congestion management. The scheme is
explained with a simple two bus system shown in Figure 4.5.
122
Figure 4.5: Two area system
With no congestion, the market will settle at a single unconstrained market price MPU, and
the total generation and load will be equal, i.e.,
.................................................................................(4.83)
Where,
generation in areas A and B respectively
loads in areas A and B respectively
Since price area A has overall cheaper generation, area A will be net exporter and flow on
line AB will be from A to B. If this unconstrained market settlement results in exceeding the
transfer limit of line AB, then each zone is treated as a separate area, and the zonal markets
are resolved separately. The power balance constraint in zone A is that generation equals
area A load plus transfer on line AB. The value of transfer is the maximum transfer limit of
line AB. An example of the supply and demand curves for two areas A and B is shown in
Figure 4.6.
Figure 4.6: Price area settlement for Two zone system
Here, the unconstrained market clearing price is MPU. The exchange capacity is included in
the area price calculation by moving the supply curve in area B and the demand curve in
area A, as indicated by the dotted curves. Now,
.......................................................................................(4.84)
123
Similarly,
........................................................................................(4.85)
Individual settlements for each market is done once again. This arrangement ensures that
PAB is restricted to . It can be seen from the Figure 5.6 that the area A price (MPA) is lower
than unconstrained market clearing price (MPU), where as the price of area B (MPB) is
higher than (MPU). The difference between the respective area prices and the system price
is called the network rent and is given as:
.....................................................................................(4.86)
Algorithm for Price Area Congestion Management

1. Solve unconstrained market clearing process. That means, the market clearing for
the whole system is done using only bid data and without network constraints.
2. A power flow simulation is carried out using nodal injection data obtained after step
1.
3. Check whether any of the line limit is getting violated.
4. Depending on the congestion bottleneck, form the price areas across the congested
corridor.
5. Do separate market settlements in each price area. Thus, two separate market
clearing prices are formed.
6. Adjust demand curve in cheap price area by giving it a lateral shift to the right.
Similarly adjust supply curve in high price area by giving it a lateral shift to the
right. The amount of lateral shift is equal to the line flow limit of congested
bottleneck.
7. After making adjustments given in step 6 and doing market clearing for individual
areas, it is ensured that transmission congestion is relieved. This leads to two
different prices in two price areas. The settlements are done using respective area
prices.
Illustrative Example
124
Consider a two area system as shown in Figure 4.5. Suppose the capacity of line between
the system A and B is 100MW. The Power exchange receives buy and sell bids from both
areas A and B. These bids present power as a function of price. These are represented as:
...............................................................................(4.87)
................................................................................(4.88)
The bid constants are given in Table 4.7.
sell Bid Buy Bid

Area
c d a b
A 15 120 -4 -350
B 8 160 -6 -525
Table 4.7: Bid Data
Step 1: Unconstrained market settlement is done initially. This gives a market price of 35
INR/MWh. The powers in each area are shown in the Table 4.8:
Area PG PD
A 405 210
B 120 315
Table 4.8: Results of unconstrained market settlement
Step 2: Calculate the power flow on line AB. In this example,
.........................................................................(4.89)
Step 3: The results of step 1 are compared with the line flow limits to see if congestion is
occurring on any of the corridors. In this case, the flow on line connecting areas A and B is
195 MW as against its capacity of 100 MW.
Step 4: Separate the market into two price areas: area A and area B.
125
Step 5: Find out market clearing prices of individual price areas, using load and generation
bid data of respective areas. The outcome of this is presented in Table 4.9.
Area
Area
PG PD
Price
A 250 250 24.73
B 231 231 48.95
Table 4.9: Results of individual market settlement
Step 6: Using the principle of market-splitting, each area is now dispatched separately and
by including the line capacity constraint. The cumulative load curve in area A and
cumulative supply curve in area B are adjusted such that flow over a line connecting areas A
and B is restricted to 100 MW. This adjustment renders following functions for individual
market settlements:
..........................................................................(4.90)
............................................................................(4.91)
Step 7: The results of final dispatch are given in Table 4.10.
Area
Area PG PG PAB
Price
100
A 330 230 (net 30.0
export)
-100
B 174.3 274.3 (net 41.78
export)
Table 4.10: Results of constrained market settlement
In this case, after making settlements, there is some money left with the power exchange. It
is equal to differences of area prices times the flow on tie line connecting two areas.
126
Network Rent
.............................................................................(4.92)
It is apportioned to the TSOs involved for grid capacity enhancement. Bilateral contracts
that span price areas must sell the energy in the supply area and purchase energy in the load
area to account for the contribution to congestion, and to expose the contracts to the
financial consequences of congestion. It is the only instance of mandatory spot market
participation.
References:
127
LECTURE NO: - 28
CAPACITY ALLEVIATION METHODS

The methods discussed previously belong to the class of capacity allocation methods which
aim at ex-ante capacity allocation in the day-ahead stage or in general, at the time of fixing
the operation schedules. In spite of this, the possibility of unscheduled interchanges can
never be ruled out and the system operator relies on the defence mechanism employed
during real time operation, in order to relieve congestion. The other class of methods, i.e.
congestion alleviation methods are often used to relieve congestion in real time and are also
referred to as remedial actions. Some of the common congestion alleviation methods are
discussed below.
Re-dispatching
Re-dispatching is exercised as a command and control scheme, i.e., ISO curtails or increases
injections without market based incentives. As generators have to be reimbursed, the ISO
has an incentive to keep re-dispatch cost low.
Counter Trade
Counter trading is based on the same principles as re-dispatching, however, it may be

considered market oriented. Rather than applying command and control, the ISO will buy
and sell electricity at prices determined by a bidding process. The principle of counter
trading is thus a buy back principle which consists of replacing the generation of one
generator ill- placed on the grid as regards to congestion by the generation of a better placed
generator. The ISO has to buy electricity downstream of the congestion at higher cost and
sell it upstream. Thus, there is no congestion rent, instead a congestion cost for ISO. This
cost exposure is also regarded as an incentive for investment into grid capacity. Counter
trading is used for real time congestion relief in the Norwegian system.
Curtailment
128
As mentioned earlier, a transaction-based curtailment approach is another methodology that

is used for congestion management. An example is NERC‟s TLR procedure (Transmission
Loading Relief). This method is used by PJM as a last resort after its alternative congestion
management (based on LMPs as discussed earlier). In real-time operation, the ISO monitors
the system for possible security violations. In the event of such violations occurring or being
imminent, the TLR method of curtailing transactions is exercised. The transactions are
prioritized for curtailment on the basis of criteria that consider the size of the transaction, its
relative impact on the congested line flows, and the firmness level that was fixed before
dispatch. We have seen that PTDFs can be used to determine the incremental impact of any
system injection (or any bilateral transaction) on any line flow of interest. This method of
congestion management is more reliability-driven than market-driven. In this scheme, price
and the actual value of transmission are not important considerations. So, whereas this
method gains reliability-wise, it might lose on the economic front.
COMPARISON AND CONCLUSION

The rescheduling of generation and load resources and corresponding pricing have been
added with a new dimension to the operation of power market as well as system operation
after deregulation. The solution methodology for this problem is referred to as congestion
management. This chapter brings out various congestion management schemes that are
employed in various markets across the world. The methods can be coarsely classified as
market based and non-market based methods. In the market based methods, the system
operator is bothered about the economical efficiency of the generation re-adjustment
process. On the other hand the non-market based methods are driven by the simplicity and
ease of procedure.
The congestion management techniques are strongly coupled to the overall market design.
The nodal pricing or OPF based schemes require a centralized dispatch. In this scheme, the
ISO schedules generators and loads based on their bid data such that social welfare is
maximized. While doing so, network constraints are added to the optimization problem so
that the most economic nodal injection pattern is obtained without creating congestion. The
129
physical bilateral transaction is scheduled as if the generation injection submitted a zero bid
and the load submitted an infinite bid. Such a transaction is then subject to an ex-post charge
that equals the opportunity cost of transaction, i.e., the cost difference of selling the power
to the pool at the injection node price and buying it back at the take-off node price. Bilateral
traders then opt for buying financial instruments to hedge the price difference risk. Bilateral
traders can also manage transmission price risk by actively participating in congestion relief
by providing incremental/ decremental bids. The nodal pricing scheme achieves economical
efficiency, however, at the cost of complexity and transparency. The scheme is commonly
employed in LMP markets which work according to standard market design in USA .
The inter-zonal/ intra-zonal scheme tries to strike a balance between the complexity and
economic significance. The basic idea in this approach is to divide the grid into few
predefined congestion zones, which have separate markets whose respective market clearing
prices set the uniform price within the zone. It makes calculation for larger systems simpler.
In this scheme, different objectives are used to correct for inter-zonal and intra-zonal line
loadings. When inter-zonal congestion occurs, bilateral transactions across zones are subject
to ex-post congestion fee based on congestion relief cost between the zones. Zonal pricing
schemes were employed in Californian market.
Price area congestion management scheme used in Nordic pool forms a special version of
zonal congestion management scheme. It divides the system into different price areas when
there is congestion. These areas are divided at congestion bottlenecks. Each area will have
its own market. Price areas are defined pragmatically, based on experience and engineering
judgment. Some additional criteria for analytical determination of price areas is required if
the system is not radial inter-connected [1].
In contrast with the nodal pricing scheme, where implicit auctioning of transmission
capacity is done, the transmission facilities in European interconnections are allocated by
means of explicit auctioning. This separates transmission and energy markets. The
mechanisms to account for the effect of loop flows, a scheme called coordinated auctioning
is being proposed, that requires centralized auctioning of transmission interconnections.
130
The term - congestion management generally refers to the capacity allocation to various
participants before finalizing the actual schedules of nodal injections. It is possible that the
commonly employed mechanism may not lead to a feasible solution. The last resort
available with system operator is the forceful curtailment of some of the transactions, based
on some criteria. Again, the real time unscheduled flows may hit the line flow limits. For
this, congestion alleviation methods are employed which may take the form of market based
or non-market based solution.
Method
Characteristi Market Based Allocatio Alleviatio
c Example
? n n
Explicit Decentralized
European
auctioning of Yes
Yes No interconnectio
Auctionin transmission
n
g capacity
Requires
centralized
PJM, New
Nodal dispatch,
Yes Yes No England, New
Pricing implemented
York
in pool based
markets
Can be used
with
Zonal centralized Australia and
Yes Yes No
Pricing dispatch or Nordic pool
using market
splitting
Re-
- Yes No Yes -
dispatch
Replacement
of ill placed
Counter
producer with Yes No Yes Sweden
Trade
better placed
producer
Some norm of
Most of the
Pro-rata allocation, not
No No Yes developing
methods necessarily
countries
economically
Capacity Allocation :Comparison of congestion management methods
References:
131

Name of Faculty: Gauri Shankar Sharma Subject: RPS Semester: V Session: 2021-22 (Odd Sem) Branch: EE Batch: A Unit: V Date of Submission: 11/11/21

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Name of Faculty: Gauri Shankar Sharma Subject: RPS Semester: V Session: 2021-22 (Odd Sem) Branch: EE Batch: A Unit: V Date of Submission: 11/11/21

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MODERN INSTITUTE OF TECHNOLOGY AND RESEARCH CENTRE, ALWAR

Name of Faculty: Gauri Shankar Sharma

Semester: V Session: 2021-22 (Odd Sem)

Unit:IV Date of Submission: 11/11/21

23 Classification of congestion management mechanisms 109-111 3

24 Calculation of available transfer capability (ATC) 112-114 3

25 ATC calculation using dc and ac model 115-118 4

26 Non-market methods of congestion management 119-121 3

27 Price area congestion management 122-127 6

28 Capacity alleviation methods 128-131 4

Name of Faculty: Gauri Shankar Sharma

Semester: V Session: 2021-22 (Odd Sem)

Unit:IV Date of Submission: 11/11/21

Definition of congestion management and Reason for

23 Classification of congestion management mechanisms 48%

24 Calculation of available transfer capability (ATC) 58%

25 ATC calculation using dc and ac model 42%

26 Non-market methods of congestion management 47%

27 Price area congestion management 44%

28 Capacity alleviation methods 55%

UNIT-5 (TRANSMISSON CONGESTION MANAGEMENT)

Definition of congestion management and Reason for transfer

One should not expect things to be as simple in a deregulated power environment. In a

Whenever the physical or operational constraints in a transmission network become active,

How Transfer capability is limited?

Congestion, as used in deregulation parlance, generally refers to a transmission line hitting

 Stability Limits: The transmission network must be capable of surviving

Importance of congestion management in the deregulated environment

However, in deregulated structures, with generating companies competing in an open

CLASSIFICATION OF CONGESTION MANAGEMENT

Desired Features of Congestion Management Schemes

Economic Efficiency: Congestion management should minimize its intervention into a

Table 5.1: Classification of congestion management schemes

Figure 4.1: Phases of network access with respect to congestion

CALCULATION OF AVAILABLE TRANSFER CAPABILITY

Definition of Various Terms

Available Transfer Capability (ATC)

ATC = TTC - TRM - Existing Transmission Commitments (including CBM)

Total Transfer Capability (TTC)

Transmission Reliability Margin (TRM)

Capacity Benefit Margin (CBM)

It is defined as the amount of transmission transfer capability reserved by load serving

ATC CALCULATION USING DC AND AC MODEL

DC Load Flow Model

Following are the assumptions when DC model is employed instead of AC model:

 Voltage magnitudes are constant.

line inductive reactance in per unit

Phase angle at bus l

Phase angle at bus m

This can be expressed in a matrix form as:

row and column in matrix. Thus,

The dimension of obtained is . Let us augment it by adding zero column

Power Transfer Distribution Factor (PTDF)

Calculation of PTDF Using DC Model

Reactance of transmission line connecting buses l and m

New transaction MW amount

NON-MARKET METHODS OF CONGETSION

Capacity Allocation on First Come First Serve Basis

Capacity Allocation based on Pro-rata Methods

Capacity Allocation based on Type of Contract

In this type of capacity allocation, network capacity is allocated to a particular type of

PRICE AREA CONGESTION MANAGEMENT

This is a simplified version of the inter-zonal and intra-zonal congestion management