Graduation Year

2005

Document Type

Thesis

Degree

M.S.I.E.

Degree Granting Department

Industrial Engineering

Major Professor

Tapas K. Das, Ph.D.

Committee Member

Ramachandran K.D., Ph.D.

Committee Member

Ralph Fehr, P.E.

Committee Member

Jose Zayas-Castro, Ph.D.

Keywords

Auctions, OPF, Deregulation, FTR, Congestion

Abstract

In a deregulated power market financial transmission rights (FTR) serve as a mechanism for protecting market participants from price variation resulting from network congestion. Possession of FTRs allows participants to recover congestion related losses resulting from unequal locational marginal prices that arise from out of merit dispatch. There exists different strategies for allocating FTR which are in use in the deregulated market. Designing a comprehensive framework for market specific FTR allocation that includes factors like unbalanced FTR, FTR for losses and AC-OPF is currently a major research issue in the deregulated power industry.

This thesis develops a method for allocation of financial transmission rights that maximizes revenue while satisfying the system security constraints of alternating current (AC) networks and the revenue adequacy constraint of the financial market. Both the maximization of the FTR revenue and maintaining the constraints are accomplished through solving a modified version of the optimal power flow program. The methodology developed here considers allocation of both balanced and unbalanced point to point FTR obligations.

The design of the framework is centered around three main scenarios that arise in the allocation of FTR. In the first scenario the total FTR bid quantity is much less than the total generation quantity available in the network. To maximize revenue the ISO will allocate the entire quantity and needs to only determine the loss quantity associated with the FTR quantity.

In the second scenario the total FTR bid quantity is much greater than the total generation quantity available in the network. The ISO is required to determine the maximum allocatable FTR bid per bus in the network for the given generation limit in the network. A novel adaptation of the OPF program that maximizes the total FTR quantity allocated is run in this case to determine the maximum allocatable bid quantities. The third scenario is when the total FTR bid quantity is less than the total generation quantity available in the network but when the losses stipulated by the FTR quantity are added to the bid quantity the total generation capacity is exceeded. Here the novel adaptation of the OPF program is run to determine the maximum allocatable FTR bid quantity per bus (ceiling values). The original FTR bid quantities are then allocated upto the ceiling values determined.

When multiple FTR bids are offered on a point-to-point node pair, allocation of FTRs among the bidders for that node pair is done through an auction process. Various auction strategies such as first price uniform, discriminatory auction, and second price uniform auction are considered. The performance of the FTR allocation process is evaluated for the above auction strategies through sample IEEE networks with 9 and 32 buses, available in the MATPOWER software.

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