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Review of methods to calculate congestion cost allocation in deregulated electricity market

Zhao, Jiawei and Lu, Jianfeng and Lo, Kwok Lun (2016) Review of methods to calculate congestion cost allocation in deregulated electricity market. World Journal of Engineering and Technology, 4 (3D). pp. 16-26. ISSN 2331-4249

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With maturing deregulated environment for electricity market, cost of transmission congestion becomes a major issue for power system operation. Uniform Marginal Price and Locational Mar-ginal Price (LMP) are the two practical pricing schemes on energy pricing and congestion cost allo-cation, which are based on different mechanisms. In this paper, these two pricing schemes are in-troduced in detail respectively. Also, the modified IEEE-14-bus system is used as a test system to calculate the allocated congestion cost by using these two pricing schemes.