2012 IEEE 7th International Power Electronics and Motion Control Conference - ECCE Asia
June 2-5, 2012, Harbin, China
Optimization of Social Welfare and Transmission
Losses in Offshore MTDC Networks through
Multi-Objective Genetic Algorithm
Sı́lvio Rodrigues, R. Teixeira Pinto, P. Bauer
Electrical Power Processing Group (EPP)
Technical University of Delft
Delft, The Netherlands
Abstract—A multi-objective approach, for an envisioned future
DC independent system operator (ISO), on how to optimally
operate an offshore multi-terminal DC network is presented in
this paper. A pool market is used, in which the ISO receives the
bids, of both producers and consumers connected to the offshore
network, and determines the electricity spot price. A trade-off
between maximization of the social welfare and the minimization
of transmission losses is analyzed. The offshore multi-terminal
DC (MTDC) network here implemented is based on recent
studies [1]. The multi-objective optimization algorithm (MOOA)
determines an optimal power flow (OPF), which guarantees the
network constrains – e.g. DC voltages boundaries, maximum DC
cable current and power produced at the offshore wind farms –
as defined by the ISO are all respected.
Even on DC Networks the system losses, capitalized over a
year, can be in the range of tenths of millions of euros [2].
Consequently, a fair power losses allocation among loads and
generators has an important impact on their benefits. Therefore,
a losses allocation technique is implemented in the algorithm.
System security is also taken into consideration. In order to
enhance the DC system stability with regard to predictable
changes – demand and generation evolution – and unpredictable
events – e.g. an outage at of one of the DC voltage controlling
stations – the results of the OPF are also tested to make sure
that the offshore network always remains at least N-1 secure [3].
Index Terms – Multi-Objective Optimization Algorithm,
MTDC network, Power Losses, Social Welfare
I. I NTRODUCTION
A restructuring process in the power industry, which started
at the end of the seventies, gave birth to the world’s first
competitive market for electricity generation in Chile, in 1982
[4]. The order to privatize the United Kingdom electricity
industry in 1988, concluded with the creation, in 1992, of
the England and Wales Power Pool [5]. In the same year,
the approval of the Electricity Policy Act (EPAct) ordered
an open access to transmission networks in the USA. Ever
since, a variety of electricity pool markets have been created;
S. Rodrigues, R. Teixeira Pinto and P. Bauer are with the Technical
University of Delft, Delft, 2628CD The Netherlands (phone: +3115278 −
5744; fax: 303 − 555 − 55550); e-mail: S.M.FragosoRodrigues@tudelft.nl,
R.TeixeiraPinto@tudelft.nl , P.Bauer@tudelft.nl). J. Pierik is with ECN,
Petten, 1755LE, The Netherlands. (e-mail: pierik@ecn.nl).
1287
J. Pierik
Energy Research Center
of the Netherlands (ECN)
Petten, The Netherlands
among them, the Pennsylvania-New Jersey-Maryland (PJM)
Pool (1997), the Californian market, and the New York Power
Pool (1998) [5].
Several other countries have also implemented electricity
markets, or are in the process of doing so; e.g. Australia,
Brazil, Germany, Norway and Spain. The world-wide restruc-
turing process of the electricity industry begun more than
twenty years ago and has since deeply accelerated, creating
a political and technical turmoil [6]. The operation of large
investors or state-owned utilities is being transformed from an
rate-of-return basis to a competitive basis by the creation of
electricity markets.
Future offshore transnational offshore networks will most
probably employ a centralized model implementing a pool
market scheme to regulate the wind farms output power
[1]. Moreover, the possibility of setting up an international
ISO to regulate a future offshore transnational DC network
in the North Sea is currently under discussion [7]. Given
all the aforementioned reasons, in the present paper a pool
market scheme, controlled by an ISO, is implemented for the
operation of a future MTDC network in the North Sea.
Studies where genetic algorithms are applied to solve the
optimal power flow (OPF) problem in multi-terminal AC
systems with the social welfare, system security or power
losses as the objective functions may be found in [8] [9] [10].
II. M ARKET S CHEMES
There are various reasons for restructuring the electricity
market. In developed countries, the introduction of competition
is believed to work as a bridge to achieve higher efficiencies
in the industry, to equate price differences among far-away
regions and to, eventually, reduce the energy prices. In devel-
oping countries however, restructuring is sometimes linked to a
privatization process of state-owned utility companies. There,
the need to acquire funds to perform the system expansions,
which are required to cope with the rapid load growth, is one
of the main reasons for the electricity market restructuring.
978-1-4577-2088-8/11/$26.00 ©2012 IEEE
A. Pool Market
A Pool Market is defined as a centralized marketplace which
clears the market for buyers and sellers. In the case of an
offshore MTDC network, the sellers will be represented by the
offshore wind farms whereas the buyers will be constituted by
the onshore networks, somehow interconnected via the MTDC
network. The market participants submit their bids to the pool,
stating the amount of power that they are willing to trade. The
sellers in a pool market compete for the right to supply energy
to the grid, not to specific customers. If an electricity seller
would bid too high, it might not be included for dispatch.
On the other hand, buyers compete for purchasing power,
therefore, if their bids would be too low, they may be left
out of the market. This market scheme is shown in Figure 1.
ISO
A competitive electricity market needs an independent op-
erational grid control. Such task cannot be guaranteed without
establishing an ISO [6]. The ISO administers transmission
tariffs, maintains the system security, coordinates maintenance
scheduling, and has a decisive role in coordinating the long-
term planning. It functions independently of any market par-
ticipants, such as transmission owners, generators, distribution
companies and end-users. Moreover, it should also provide
non-discriminatory open access to all transmission system
users. The ISO has the authority to commit and dispatch some
or all the system resources; and to shed loads if necessary to
maintain system security, e.g. remove transmission violations
or balance supply and demand.
By running an auction for the electricity trade, the ISO
ensures a competitive marketplace. The spot price, also desig-
nated market clearing price (MCP), is obtained based on the
lowest bid, which is the bid of the last demand entity which
was admitted to enter the market. In order to obtain the spot
price, the ISO makes use of an optimal power flow (OPF)
dispatch model, taking into consideration the constraints of
the network. Market participants must provide extensive data,
such as cost data for every generator and daily demand for
every consumer or load. Utilizing these extensive data, the ISO
obtains the unit commitment and the correspondent dispatch,
which maximizes the social welfare and sets transmission
Offshore Wind Farms
Bids MCP
POOL MARKET
Bids MCP
Onshore Stations
Figure 1: Diagram of a pool market applied to a future
offshore MTDC network.
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congestion prices. The social welfare can be mathematically
described as:
 T 
Social welfare = CD PD − CST PS (1)
where CD and CS are, respectively, demand and supply bids
vectors in e/MWh, whereas PD and PS represent the demand
and supply power bids vectors in MW.
Optimal power flow
As previously mentioned, the ISO makes use of an OPF
in order to dispatch the entities involved in the pool market.
During the optimization process, all the network constraints
are taken in to account. These constraints are usually described
as a set of equality and inequality functions [11]. Using the
following security-constrained optimization problem, an OPF-
based market model can be represented as [12]:
OPF equation: f (PS , PD ) (2)
Constraints:
⎧ min max
⎪
⎪ VDCi ≤ VDCi ≤ VDC
⎪
⎨ P =  i
S PW F s
(3)
⎪
⎪ 0 ≤ PDi ≤ PVmax
⎪
⎩
SCi
max max
−IDC ≤ I DC i
≤ IDC
i i
where VDC represents the nodal DC voltages inside the MTDC
network; PS and PD stand for supply and demand power bids;
and IDC is the current flowing in the DC cables.
Additionally to respecting the network’s voltage and current
constraints, the OPF algorithm here implemented will make
sure that the ISO is presented with solutions for the MTDC
network power flow which are N-1 secure. In this way, the
reliability and security of the grid are enhanced. As a matter of
fact, in case of an outage in any of the DC network terminals,
if the OPF solution is guaranteed to be N-1 secure, the power
balance inside the MTDC grid will be maintained. [3].
B. Transmission Loss Allocation
Hitherto, the aforementioned OPF still does not take into
account the network topology and, therefore, the power losses
are not explicitly taken into account. In a practical implemen-
tation of a MTDC network, the question of whom should be
the responsible for the system losses payment naturally arises
[13]. Since system losses can be typically estimated as five
to ten percent of the total generation, if capitalized over the
course of one year, the value of system losses can be in the
range of tenths of millions of euros [2]. Consequently, a fair
power losses allocation among loads and generators has an
important impact on their benefits and needs to be included in
the optimization algorithm.
Although transmission
 losses are nonlinear functions of
2
the line flows Plosses ∝ Iline , several studies have tried
to determine which amount of a line power flow is the
responsibility of a given generator or demand. In [14] and
[15] new methods for tracing the flow of electricity in meshed
electrical networks are proposed.
 Due to the lack of a perfect algorithm for tracing the
power flow, its acceptance will mainly depend on the perceived
fairness as seen by each one of the pool participants [13]. In
this work, the chosen transmission losses allocation procedure
is a circuit-based strategy known as Z-bus loss allocation
method [2]. A brief description of the procedure is given in
the following section.
Z-bus Loss Allocation Method
The classic Z-bus allocation method used mostly on AC
networks, is here modified for its application in DC networks
[2]. The Z-bus method emphasizes the currents, instead of the
active power flow, during the losses allocation. It also takes
into consideration the DC network topology. Therefore, gen-
erators or loads which are located in distant regions from the
network center of gravity tend to proportionally be allocated
higher losses.
The Z-bus allocation method makes use of a previously
solved power flow to systematically distributes the power
transmission losses, Plosses , amongst all the nodes present in
the MTDC network. This procedure can be mathematically
expressed as:
n best, i.e. non-dominated, solutions found while the algorithm
Plosses = Lk (4)
k=1
where Lk stands for the power losses fraction allocated to the
k-th DC node, and n is the total number of nodes inside the
MTDC network.
In this way, the responsibility of paying for its losses share
is assigned to each individual market participant. The extra
cost due to the loss allocation must then be deducted from
the revenue of the generating entities and added to the load
payments in order to maintain the pool revenue null.
If a certain DC node has both generation and demand, its
allocated loss component, Lk , may be divided among the
different players in a pro rata manner [2]. On the contrary,
if a specific DC node has neither load nor generation, its loss
allocation must be zero.
In order to calculate the allocation fractions, Lk , the Z-
bus method makes use of the network impedance matrix, Z.
The latter can be further separated into two matrixes: the
resistance matrix, R, and the reactance matrix, X. However,
for the power losses calculation only the resistance matrix is of
concern [2]. Hence, the power losses can be achieved through:
⎛ ⎞
n n
Plosses = Ik ⎝ Rkj Ij ⎠ (5)
k=1 j=1
where Ik is the DC current injection at the node k, Rkj is the
DC cable resistance between the nodes k and j, and Ij is the
DC current injection at node j.
Finally, the loss allocation terms, Lk , can be expressed as:
⎛ ⎞
n during the simulations. It is a parallel-connected meshed
L k = Ik ⎝ Rkj Ij ⎠ (6)
j=1
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As can be seen from (6), the loss component Lk , is
equivalent to a weighted function where the current in node
k, Ik , serves as weight to the sum of the currents in all the
network nodes. With this approach, no special assumptions
or approximations are necessary to derive the loss allocation
terms.
III. M ULTI -O BJECTIVE O PTIMIZATION A LGORITHM
In many real-world situations there may be several objec-
tives which must be optimized simultaneously in order to solve
certain problems. The main difficulty when considering multi-
objective optimization problems is that, in such cases, there
is no definition of optimum solution. Therefore, it is difficult
to compare solutions and decide which ones are better. The
quality of a solution is subjective and depends on the needs
of the designer or decision maker [16]. The main goal of a
multi-objective optimization algorithm (MOOA) is the attempt
to minimize the distance of the solutions from the problem
optimal trade-off curve, also known as Pareto front [17].
The OPF problem is solved with a genetic-based algorithm
[18]. There are two distinctive populations in the algorithm:
the solutions population and the elite set which contains all the
is still running. However, the elite set has to have a maximum
capacity. If the algorithm does impose a limit, the computation
complexity will keep increasing with the elite set size increase.
If the elite size is made finite, once it is full, new non-
dominated chromosomes have to compete with the solutions
already present in the elite set. This is done through means of a
crowding tournament. The objective is to enlarge the distance
between the members of the elite in order to cover a larger
area of the Pareto front [17].
The implemented algorithm uses an elitist approach for
the population of solutions. This guarantees that the best
chromosomes are not lost between two iterations due to the
effects of the randomized genetic operators, i.e. mutation
and crossover. As a consequence, the speed of the algorithm
increases, and a solution for the problem can be achieved
in a smaller number of iterations. As far as the the genetic
operators are concerned, a heuristic crossover [19] is applied.
Additionally, several mutation strategies are implemented [17]
in order to avoid the genetic algorithm from getting trapped
in possible local minima of the problem. Figure 2 depicts a
diagram of the implemented MOOA algorithm used in the
simulations.
IV. C ASE S TUDY
The main objective of the case study is to obtain a Pareto
front showing a trade-off between the minimization of the
transmission losses and the maximization of the social welfare.
The latter is calculated as in (1), while the transmission losses
can be calculated by (5).
The MTDC network displayed in Fig. 3 is the one used
network, composed by 11 nodes and 11 DC cables. There
are a total of 5 offshore wind farms connected to 3 different
 PWF 1 0.5 pu PWF 5 0.9 pu
WF 1 WF 5

N1 N5

line 2 20 km line 9 15 km
N6 line 1 line 8 line 10 N8
N9
125 km 400 km N11 125 km
line 3
AC VSC 1 20 km
line 4 VSC 3 AC
line 11
network 1 N2
200 km
network 3
200 km
PWF 4 0.7 pu
N10
line 6 WF 4
PWF 3 0.5 pu line 5
WF 2 WF 3 15 km
15 km N4
PWF 2 0.4 pu 100 km
N3 line 7

N7

VSC 2 AC
network 2

Figure 3: Meshed MTDC network used in the simulations.

Initial
onshore grids [1].
population
The MTDC network parameters are given in Table I. The
system power base is 500 MVA. During steady-state operation
all DC voltages must lie within ±5% of the nominal value. The
Fitness evaluation DC line distances are given in Fig. 3. The wind farms cables
(lines 2,3,5,6 and 9) are rated at 500 MW, whereas all the other
DC cables have two times the capacity of the wind farms, i.e.
Distance Elite
1000 MW. The extra capacity in the offshore hub cables is
designed in order to increase the network flexibility and to
enhance power trade between the countries. The power being
Non- Yes Yes Crowding produced at the offshore wind farms during the simulation
New generation Elite Full?
dominated? Competition scenarios is also given in Fig. 3.
No No In this study, the market clearing prices for the 3 intercon-
nected countries are considered to be 60 e/MWh in Norway,
Genetic Operators
No Population
Checked?
Add to Elite 72.8 e/MWh in the UK and 77.5 e/MWh in the Netherlands
[1]. The offshore DC network is operated in such a way that
Yes there are no congestions due to electricity trade between the
countries and, therefore, all the power being produced at the
No Yes Output
Selection Terminate? wind farms can be injected in the MTDC network.
Elite

Figure 2: Multi-Objective Optimization Algorithm diagram.

TABLE I: MTDC Network Rated Parameters.

Parameter Unit Value

onshore networks, which represent countries. In the case study
these countries are considered to be the United Kingdom, the Offshore VSC Rated Power Sowf MVA 500
Netherlands and Norway, respectively. Onshore VSC Rated Power Svsc MVA 1000
All the offshore wind farms are connected to hubs instead Rated DC Voltage Vdc kV ± 200
of being directly connected to its rightful owner country. MTDC Network Cable impedance Zdc Ω/km 0.02
Furthermore, each hub is connected to its respective country, DC lines 2,3,5,6 & 9 Pdc MW 500
but also to adjacent hubs. This type of DC network connection DC lines 1,4,7,8,10 & 11 Pdc MW 1000
enhances the electricity trade amongst the interconnected

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 V. R ESULTS
A trade-off – or Pareto Front – for the operation of the
MTDC network under study is obtained by solving the OPF
problem with the multi-objective genetic algorithm presented.
The resulting network power losses and social welfare are
shown in Fig. 4 (a).
However, not all the obtained solutions are guaranteed to be
N-1 secure. Therefore, all solutions are tested against a DC
load-flow algorithm. The algorithm systematically applies a
fault to one network node at a time. Afterwards, it excludes
solutions that do not respect the DC voltage and current
constraints for all the possible N-1 scenarios. The new set of
solutions is displayed in Fig. 4 (b), where the optimal Pareto
front is also highlighted.
A. Case Studies
Three different case studies are analyzed in order to get
an insight on the influence of the pool market and ISO in
establishing the MTDC operating point and its position with
regard to the obtained Pareto front.
Table II contains the detailed description of each case study.
Depending on the restrictions selected by the ISO, some
MTDC operating points on the Pareto front may become
unavailable. Fig. 5 shows, for the selected case studies, the
available operating points on the Pareto front and the market
clearing price. The hollow points on the Pareto fronts (Fig.
5), represent unavailable operating points due to the ISO and
Pool Market restrictions. In addition, Fig. 5 also displays, for
each analyzed case study, the MCP obtained for the two most
extreme points on the available Pareto front. These points are
equivalent to the lower losses (point A) and the higher social
welfare (point B) scenarios.
Finally, Table III contains the power flow results for the
lower losses (point A) and higher social welfare (point B)
scenarios for all the examined case studies. It displays the
nodal DC voltages (in per unit), the loss allocation coefficients
(in percentage of the losses), the transmission losses (in
percentage of the offshore generation) and the resultant social
welfare.
TABLE II: Description of the analyzed case studies
Case Description
Case i No restrictions applied.
Case ii At least some of the offshore power being pro-
duced at the Norway wind parks has to be con-
sumed locally.
Case iii Idem as Case ii. In addition the Netherlands is
willing to buy power for an extra 0.5 pu on top
of its offshore wind farm production of 1.2 pu.
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Case Study i
In the first case scenario, as stated in Table II, there are no
extra restrictions applied by the ISO to the load flow. In this
way, the entire Pareto front (Fig. 5 (b)) is reachable.
For the point A, where the lowest power losses are found,
the resultant load flow shows that the WFs are sending almost
all of their generation to the respective countries. In this way,
the power flow inside the grid is minimized and, thus, the
power losses are optimal. Since all countries are receiving
power produced offshore, the MCP, as shown in Fig. 5 (d),
is equal to 60 e/MWh, which corresponds to the bid lowest
bid, made by Norway.
The loss components, Lk , are all positive for point A,
meaning that all the market participants are responsible to
pay part of the power lost in the transmission system. The
Netherlands has the highest loss component (28.78%) since it
is the node which receives the highest amount of power from
the MTDC grid. This is because the Dutch farms have the
highest combined production. Among the offshore nodes, the
highest loss allocation is given to the Norwegian WF (9.03%)
since it has the highest single production and, therefore, it is
the one that injects the most power in the network.
In point B, the social welfare is being maximized. In order
to do so, the countries with the highest electricity bids have to
receive the most power from the grid. As shown in Fig. 5 (d),
both the Netherlands and the UK are receiving power at their
maximum capacity, i.e. 2 pu. Since the total power production
at all the WFs is 3 pu, Norway is transmitting the extra power
for allowing the maximization of the social welfare. The MCP
for this operating point is the British bid, i.e. 72.8 e /MWh
(Fig. 5 (d)).
In this scenario, the loss components of the Dutch and
British WFs are negative. Negative loss components represent
monetary incentives to market participants that are positioned
in strategic places in the network [2], helping, in this way,
to achieve the desired load flow. On the other hand, the loss
component of the Norwegian WF is positive. This has to do
with the fact that this WF is transmitting power to the UK
and the Netherlands. Consequently, since the WF is located
far from both countries, such injection of power into the
MTDC grid has a significant impact in the total transmission
losses. Nevertheless, all the onshore nodes are still allocated
the highest loss components. The UK is the node receiving the
highest amount of power that is not being produced at its WFs
(1.1 pu), consequently it is the node with the highest share of
power losses (42.04%).
Case Study ii
In Case ii, an additional constraint is added; at least some
of the offshore power being produced at the Norwegian wind
park has to be consumed locally. Due to such constraint,
approximately half of the previous Pareto front becomes
unavailable operating points. The load flows with the highest
social welfare values are not tangible in this case since they
require Norway to transmit power to the MTDC network.
 Power losses and Social Welfare Power losses and Social Welfare: N-1 secure and Pareto Front
7 7
All solutions found N-1 Secure Solutions
Pareto-Front Solutions
6 6

5 5
Power Losses [%]

Power Losses [%]

4 4

3 3

2 2

1 1
35 40 45 50 55 60 65 70 75 80 35 40 45 50 55 60 65 70 75 80
Social Welfare [€/h] Social Welfare [€/h]

Figure 4: Network power losses and social welfare. On the left side all the results are shown and on the right side only the
solutions that are N-1 secure.

Case i - No restrictions Case ii - One restriction Case iii - Two restrictions

7 7 7

Unavailable operating points Unavailable operating points Unavailable operating points

Available operating points Available operating points Available operating points
6 6 6
Power Losses [%]

5
Power Losses [%]

Power Losses [%]

5 5

4 4 4

3 3 3

2 2
2

1 1
1 58 60 62 64 66 68 70 72 74 76 78
58 60 62 64 66 68 70 72 74 76 78 58 60 62 64 66 68 70 72 74 76 78
Social Welfare [€/h] Social Welfare [€/h] Social Welfare [€/h]

Figure 5: Pareto Front and Market Clearing Price (disregarding losses) for the analyzed case studies. The full points on the
Pareto front represent the available operating points according to the ISO and Pool Market restrictions. The MCP is depicted
for the lower losses (point A) and the higher social welfare (point B) scenarios for each case study.

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 TABLE III: Power flow results and loss allocation coefficients for the analyzed case studies.

Case i Case ii Case iii

Node A B A B A B
VDC Lk VDC Lk VDC Lk VDC Lk VDC Lk VDC Lk
WF1 1.0272 5.05 0.9983 -2.29 1.0272 5.05 1.0141 1.71 1.0021 2.46 1.0141 1.71
WF2 1.0269 3.83 0.9980 -1.89 1.0269 3.83 1.0138 1.25 1.0018 1.81 1.0138 1.25
WF3 1.0268 4.62 1.0064 -0.18 1.0268 4.62 1.0095 -1.17 0.9992 0.16 1.0095 -1.17
WF4 1.0271 7.02 1.0068 -0.12 1.0271 7.02 1.0098 -1.32 0.9996 0.63 1.0098 -1.32
WF5 1.0271 9.03 1.0352 12.70 1.0271 9.03 1.0256 15.86 1.0105 16.491 1.0256 15.86
VSC1 1.0128 19.39 0.9666 42.04 1.0128 19.39 0.9986 15.22 0.9863 19.61 0.9986 15.22
VSC2 1.0118 28.78 0.9811 26.97 1.0118 28.78 0.9842 68.72 0.9771 61.39 0.9842 68.72
VSC3 1.0118 22.27 1.0494 22.76 1.0118 22.27 1.0237 -0.26 1.0045 -2.55 1.0237 -0.26
PL [%] 1.46 6.42 1.46 2.63 2.08 2.63
SW [e /h] 59.07 77.52 59.07 71.69 68.14 71.69

The operating point A for Case ii is the same one as found
in Case i. This is due to the fact that the unavailable part of the
Pareto front is located on the region where the social welfare
is maximized.
On the other hand, point B is now shifted along the Pareto
front. In this operating point, Norway is neither receiving or
injecting power in the MTDC network (see Fig. 5 (e)). Since
the Dutch bid is the highest one, the maximization of social
welfare is now made through the transmission of 2 pu of power
to the Netherlands (maximum capacity of the node) and 1 pu
to the UK. The MCP is once again defined by the bid made
by the UK.
Regarding the loss components for point B, it is interesting
to notice that both the Dutch WFs have negative values. The
Netherlands is the node that needs to receive the most power
in order to maximize the social welfare. Consequently, since
both WFs are the closest generating nodes from the Dutch
grid, they are the ones that contribute most efficiently the load
flow. On the other hand, the Dutch onshore node is allocated
the highest share of transmission losses.
Once again the Norwegian WF is allocated a positive Lk .
Since barely no power is being transmitted to Norway, its
offhshore production is being delivered to the Netherlands.
In this way, the power has to be transported from the WF
to the Dutch onshore node. Due to this additional flow, the
power losses increase and, therefore, the loss component of
the Norwegian WF have to account for the additional power
losses.
Case Study iii
In the last case study, on top of the restriction imposed
in Case ii, the Netherlands requests, besides the power being
produced at its wind farms, an extra 0.5 pu of power extra
from the MTDC network.
The operation point A is now shifted to the right along
the subset of the Pareto front of the Case ii. In this new
point A, the Netherlands is now receiving 1.7 pu of power
from the MTDC network (see Fig. 5 (f)). Since point A from
Case i is no longer feasible due to the constraints imposed
by the ISO, the closest operation point is achieved when 1.7
pu of power is being delivered at the Dutch onshore node.
For such power flow scenario, the highest loss component is
once again attributed to the Netherlands. The Dutch WFs are
producing a total 1.2 pu of power, thus, the additional 0.5
pu has to be produced and transported from somewhere else
in the MTDC network. Through the power flow results it is
possible to observe that this additional power is coming from
the Norwegian WF. Hence, the latter is assigned a positive
and higher Lk , when compared to the other WFs, which are
sending their generation to their respective countries.
The extra constraint added in Case iii rules out operation
points from the Pareto front were the lowest power losses
can be found. Therefore, the point that maximizes the social
welfare (point B) is kept constant and equal to the one from
Case ii.
VI. C ONCLUSIONS
A market pool structure has been analyzed for a future
MTDC network in the North Sea. A new offshore ISO
would be in charge of receiving the bids of the pool market
participants and to allocating them the load flow according
with certain criteria. Additionally, a loss allocation procedure
was also implemented in order to distribute the transmission
power losses costs in a fair way amongst the generator and
consumer entities.
The operation of the MTDC network was optimized with
the aid of a multi-objective genetic algorithm set to optimize
the network transmission losses and the social welfare. The

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addition of extra constraints to the power flow prohibited the
operation in some regions of the Pareto front. Consequently,
it may happen that it will not be possible for the ISO to
operate the MTDC network in the cases where the optimal
power losses or social welfare are found.
From the loss allocation procedure it was possible to con-
clude that countries with higher bids, and which require more
power than the one being generated at their offshore locations,
will be allocated the highest penalties regarding the losses
inside the MTDC network.
Nevertheless, from the results it can be seen that the maxi-
mization of the social welfare is achieved by the transmission
of more power to the countries with higher spot prices for
electricity. In this way, the operation of expensive, highly-
pollutant, and non-efficient onshore generators is prevented.
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ACKNOWLEDGEMENTS
The work has been performed within the projects “Far and
Large Offshore Wind (FLOW)” and “North Sea Transnational
Grid (NSTG)” (EOS LT 08019). The projects are supported by
the Ministry of Economic Affairs, Agriculture and Innovation
of the Netherlands within the EOS-LT program of Agentschap-
NL. The opinion expressed by the authors do not necessarily
reflect the position of the Ministry of Economic affairs, nor
does it involve any responsibility on its part.

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