ECE666: Power Systems Operation

Winter 2017
Assignment-2
Last Date of Submission- Monday, 20th March 2017, 4:30 PM

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1. Consider a double auction electricity market where two suppliers A and B offer their
energy for sell. There are two customers X and Y bidding to buy energy from the market.
The buy bid and sell offer prices are given below:
Sell = 0.4 ⋅ PG + 15 Buy
ρA A ρX = 235 − 0.45 ⋅ PD X
Sell = 0.15 ⋅ PG + 11
ρB B ρYBuy = 175 − 0.235 ⋅ PDY

Supplier A and customer Y are located in the West Area, while supplier B and customer
X are in the East Area, and the two areas are inter-connected by a transmission line of
capacity TMAX MW.
a. Find the market settlement, as a uniform price market, without considering
transmission constraints.
b. Now taking the transmission line limit into account, derive the general expression
for the two area prices as functions of TMAX.
c. What is the total Congestion Rent and which bus participants will pay this rent?
d. Customer-X holds an FTR of 0.5TMAX from East to West, and Generator-A has an FTR
of 0.75TMAX from West to East. Find the net congestion payment for these
participants.
e. For what value of TMAX does the LMP market converge to a uniform price market?

2. Consider the 4-bus power system shown below. Bus-1 and bus-4 have generators with
10 $/MWh and 20 $/MWh average cost of generation, respectively. Bus-2 has a load of
180 MW while bus-3 has a load of 320 MW. The line impedances have the following
relations: Z1-2 = Z3-4, Z1-3 = Z2-4; and that, Z1-2 = 2Z1-3.
a. Find the LMP at each bus, if the transmission line limits are ignored.
b. Find the power flows on the lines for case (a).
c. Find LMP at each bus, if all transmission lines have a maximum capacity of 250 MW.

G1 = 10 $/MWh
0 ≤ PG1 ≤ 600 MW
180 MW

Bus-1 Bus-2
c

c
c

c
320 MW

Bus-3 Bus-4

G4: 20 $/MWh
Page 1 of 4 0 ≤ PG4 ≤ 200 MW
 3. The figure below shows a lossless two generator five bus system where bus 1 and 2 are
generator buses, buses 3, 4 and 5 are load buses. The generation cost of G1 is 10
$/MWh and of G2 is 20 $/MWh. The transmission line 1-4, shown by the thick dotted
line, is congested in the direction from Bus-1 to Bus-4. All the five transmission lines
have equal impedances. Find the LMPs at buses 3, 4 and 5.

G1

Bus 1 Bus 3

Bus 5
Bus 4 Bus 2

G2

4. For the 3-bus system shown below, the generator cost functions are given as:
C1(PG1 ) = 0.001PG21 + 2.5PG1 + 450 $ / hr

C2 (PG 2 ) = 0.0025PG2 2 + 2 PG 2 + 250 $ / hr

The load at Bus-1 and Bus-2 are PD1 = 200 MW and PD2= 150 MW respectively. The load
at Bus-3 is price elastic with a benefit function W3(PD3) = 4.25PD3+500 $/hr. All the
transmission lines have a maximum capacity of 500 MW. The line admittances are:
yL1 = -j10 p.u.; yL2 = -j5 p.u.
Find the LMPs at each bus and the market clearing dispatch using DC OPF. Use a base of
100 MW for converting the power demand to per unit quantities.

5. Consider a double auction electricity market where three suppliers A, B and C offer their
energy for sell at offer prices given below. There are three customers X, Y and Z bidding
to buy energy from the market, and their bid prices are also given below. The
transmission line capacities are shown in the figure.

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 Area-2
Area-1
B
A PMax = 200 MW

Y X

PMax = 100 MW

Area-3

Z C

Sell = 0.5 ⋅ PG + 20 Buy

ρA A ρX = 200 − 0.5 ⋅ PD X
Sell = 0.2 ⋅ PG + 10
ρB B ρYBuy = 167 − 0.135 ⋅ PDY
Sell = 0.4 ⋅ PG + 25
ρC C ρ ZBuy = 252 − 0.412 ⋅ PDZ
a. Find the market clearing of all participants, ignoring the transmission limits.
b. Find the market clearing of all participants when transmission limits are considered.
c. If Y holds an FTR for 150 MW and X holds an FTR for 50 MW, both in the direction
from Area-2 to Area-1, find the total congestion rent paid by each customer.

6. Consider the small power system shown below. Generators G1 and G2 have incremental
costs of 20 $/MWh and 25 $/MWh, respectively. All transmission lines have the same
impedances, their maximum capacity is 200 MW. The generator limits are as follows:
50 MW ≤ PG1 ≤ 750 MW; 50 MW ≤ PG2 ≤ 500 MW
1 2

1 2

150 MW 200 MW

250 MW
a. Evaluate the power flows on each line and hence find the marginal cost of supplying
power at each bus when transmission limits are ignored.
b. Repeat (a) for the case when transmission limits are considered.
c. Now, in (b), let customer at bus-3 with 250 MW demand has purchased an FTR for
200 MW in the direction from bus-1 to bus-3. Find the FTR credit it receives when
congestion occurs on line1-3, and the net congestion charge it has to pay.

7. There are three supply-side participants (A, B and C) and three demand-side participants
(D, E and F) in a double-auction electricity market, and their supply / demand offers are
given below.
ρ ASELL = 0.5PG A + 25; ρ BSELL = 0.2 PGB + 10; ρCSELL = 0.1PGC + 18
ρ DBUY = −0.25PDD + 180; ρ EBUY = −0.40 PDE + 210; ρ FBUY = −0.37 PDF + 195
(ρA , ρB and ρC are the sell-offer prices, ρD , ρE and ρF are the buy-offer prices)

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 a) Assuming a perfectly competitive electricity market, determine the uniform market
price and the energy cleared for all participants.
b) Consider that A, B, E and F are located in West-Region while C and D are located in
the East-Region. The tie-line connecting the two regions has a total capacity of 150
MW. Determine the new market clearing conditions (dispatch, price, etc.)
incorporating the transmission line limit.
c) Now consider that the transmission loss on the tie-line is 8%. Also given that the
East-Region bus is the Reference Bus. Find the constraint cost of the tie-line and the
LMP at the East-Region bus and the West-Region bus.
d) How much will be the Congestion Rent, based on the answer of (c), and which bus
participants will pay?
e) Customers-E and F have jointly purchased a Firm Transmission Right (FTR) of 150
MW from East-Bus to West-Bus, while Generator-D has an FTR of 125 MW from
East-Bus to West-Bus. Find the net congestion payment of each participant to the
transmission company.

8. Consider a double auction electricity market where two suppliers A and B offer their
energy for sell at offer prices given below. There are two customers X and Y bidding to
buy energy from the market, and their bid prices are also given below. The transmission
line capacity is 200 MW.
East Area
West Area
B
A PMax = 200 MW

Y X

ρ ASell = 0.5 ⋅ PG A + 20 ρ XBuy = 200 − 0.5 ⋅ PD X

ρ BSell = 0.2 ⋅ PG B + 10 ρ YBuy = 167 − 0.135 ⋅ PDY

You are informed that the electricity market price would be 105.24 $/MWh, for the
above set of bids, considering a uniform price settlement, if the transmission limit is
ignored. With this information given, find the electricity market price settlement and
market clearing dispatches of all participants when the transmission line limit is taken
into account. Assuming that Y holds an FTR for 150 MW and X hold an FTR for 50 MW,
both in the in the direction from East to West, find the total congestion rent paid by
each customer.

9. There are two supply-side participants (A and B) in a single-auction electricity market,

and their supply offers are given below.
ρASELL = 0.6 PG + 100; ρ SELL = 0.32 PG + 440 (ρ and ρ are offer prices)
A B A B
B
Consider that the demand (PD) is price elastic, and is given as a function of the market
price, as follows:
PD = 535 − ρ
In a scenario of Cournot competition where A and B are indulging in maximizing their
respective profits, find the Nash equilibrium solution of the above auction.

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