Hierarchical Congestion Management for a Deregulated Power Industry

The electric power industry in the United States is in the midst of a dramatic transformation toward a deregulated structure. Transmission line imposed constraints have been viewed as one of the main obstacles to opening transmission access and creating free electricity markets across large geographical areas. This thesis presents a systematic framework for managing transmission system congestion in the competitive electricity markets. Under this framework, markets for transmission are functionally separated from generation markets. Proposed usage-based pricing strategies for short-term and long-term transmission services provide economic incentives to network users to adjust their requests so that flows on transmission lines remain within the technical limits with high probability. A near-optimal market equilibrium is achieved by means of interactions between the decentralized optimization processes performed by individual market participants and the coordination provided by transmission owners. This design makes it possible to maintain system security in an open access environment while each network user is attempting to optimize its own benefit. A new probabilistic optimal power flow (POPF) method, which projects longterm values of transmission links and line flow probability distributions based on a given load duration curve and the public knowledge of power plant characteristics, is developed by linearizing the AC OPF equations at different system load levels. The probability information calculated using POPF assists an ex ante estimation of the availability of transmission facilities and indicates market risks for both network users and transmission companies. A priority-based transmission service based on a bottom-up auction mechanism to purchasing long-term transmission service is posed here as a dynamic decision making problem under uncertainties. A dynamic programming-based formulation is given for an efficient relief of network congestion in real-time operations without violating prior obligations in long-term transmission right markets. Thesis Supervisor: Marija D. Ilid Title: Senior Research Scientist