IMPACT OF FACTS DEVICES ON TRANSMISSION PRICING

Abstract

Transmission pricing has been an important issue after the power-system restructuring and deregulation. Due to increased competition and willingness to maximize the profit, generation companies are looking for solution to minimize the transmission cost. Transmission charges are very vital indicators used by the markets to make decisions on the allocation of resources, system expansion and -reinforcement. In the present pace of power system restructuring, transmission systems are being required to provide increased power transfer capability and to accommodate a much wider range of possible generation patterns. Environmental, right-of-way and cost problem are the major hurdles for power transmission network expansion. Hence there is an interest in better utilization of available power system capacities by installing new devices such as flexible alternating current transmission systems (FACTS). FACTS devices can be an alternative to reduce the flow in heavily loaded lines, resulting in an increased loadability of network, -reduced cost of production and fulfilled contractual requirement by controlling the power flows in the network. This dissertation report consists of introduction to FACTS devices in deregulated environment, calculation of wheeling charges through Bialek's tracing algorithm and MW-Mile method and calculation of line congestion charges in LMP based market. Finally the results demonstrate the impact of FACTS devices on transmission wheeling charges and line congestion cost. MATLAB simulation programs are used for the calculation of wheeling charges whereas PWS (Power World Simulator) is used to solve the optimal power flow problem and to calculate the line congestion charges. The study is carried out on IEEE-14 bus system.