Implementation effects of economics and market operations based model for traditionally integrated power systems

Abstract

The main objective of this paper is to introduce power system economic operations in traditionally integrated power systems and market operations in deregulated power systems and study its effects. The power system economic operation is mathematically treated as an optimization problem. Also, a function of economic operation is to minimize generation cost, transmission losses, and so on, subject to power system operation constraints. In this paper, we start from generation cost formulations and introduce traditional economic dispatch model, optimal power flow model, and unit commitment model. With the deregulation of the power industry, integrated power system is unbundled to generation, transmission, and distribution. Electricity is traded in the wholesale market. Small customers purchase energy from electricity retailers through the retail market. The electricity market is operated for energy trading while satisfying power system operation requirements. Electricity market is mathematically modelled as an optimization problem that is subject to power system operation constraints and market operation constraints.