IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v168y2019icp1181-1191.html
   My bibliography  Save this article

Mapping between transmission constraint penalty factor and OPF solution in electricity markets: analysis and fast calculation

Author

Listed:
  • Yang, Zhifang
  • Zhong, Haiwang
  • Lin, Wei
  • Lin, Jeremy
  • Chen, Yonghong
  • Xia, Qing
  • Liu, Wentao
  • Zhang, Xuan

Abstract

-- In electricity markets, transmission constraint relaxation is frequently used to ensure the feasibility of the optimal power flow (OPF) problem and avoid the expensive yet ineffective congestion adjustment. However, transmission constraint penalty factors have a considerable impact on the market scheduling and prices. There is still no consensus on how to properly set the penalty factors. In this paper, the impact of transmission constraint penalty factors on the market solution is quantitatively investigated via the sensitivity analysis of the DC OPF model. Parametric programming is performed to determine the change of the market scheduling and prices with respect to the change of penalty factors. In particular, we prove for the very first time that when the objective function of the market model is quadratic, the parametric programming can be conveniently performed without the need of re-optimizing the DC OPF model in most cases. On this basis, an efficient method is proposed for exactly characterizing the mapping between the penalty factors and the market solution. Case studies show that the proposed method could be up to 100 times quicker than re-optimizing the DC OPF model as in the traditional parametric programming process.

Suggested Citation

  • Yang, Zhifang & Zhong, Haiwang & Lin, Wei & Lin, Jeremy & Chen, Yonghong & Xia, Qing & Liu, Wentao & Zhang, Xuan, 2019. "Mapping between transmission constraint penalty factor and OPF solution in electricity markets: analysis and fast calculation," Energy, Elsevier, vol. 168(C), pages 1181-1191.
    • Handle: RePEc:eee:energy:v:168:y:2019:i:c:p:1181-1191
    DOI: 10.1016/j.energy.2018.11.048
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544218322527
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2018.11.048?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kharrati, Saeed & Kazemi, Mostafa & Ehsan, Mehdi, 2016. "Equilibria in the competitive retail electricity market considering uncertainty and risk management," Energy, Elsevier, vol. 106(C), pages 315-328.
    2. Jennifer La'O & Luigi Iovino, 2017. "Informationally Sticky Nominal Wages," 2017 Meeting Papers 1517, Society for Economic Dynamics.
    3. Martin D. D. Evans & Richard K. Lyons, 2017. "Informational Integration and FX Trading," World Scientific Book Chapters, in: Studies in Foreign Exchange Economics, chapter 7, pages 291-324, World Scientific Publishing Co. Pte. Ltd..
    4. Liu, Haifeng & Tesfatsion, Leigh S. & Chowdhury, A.A., 2009. "Locational Marginal Pricing Basics for Restructured Wholesale Power Markets," Staff General Research Papers Archive 13072, Iowa State University, Department of Economics.
    5. Assembayeva, Makpal & Egerer, Jonas & Mendelevitch, Roman & Zhakiyev, Nurkhat, 2018. "A spatial electricity market model for the power system: The Kazakhstan case study," Energy, Elsevier, vol. 149(C), pages 762-778.
    6. Fitiwi, Desta Z. & Olmos, L. & Rivier, M. & de Cuadra, F. & Pérez-Arriaga, I.J., 2016. "Finding a representative network losses model for large-scale transmission expansion planning with renewable energy sources," Energy, Elsevier, vol. 101(C), pages 343-358.
    7. Nezamoddini, Nasim & Wang, Yong, 2016. "Risk management and participation planning of electric vehicles in smart grids for demand response," Energy, Elsevier, vol. 116(P1), pages 836-850.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Lin, Wei & Jiang, Hua & Jian, Haojun & Xue, Jingwei & Wu, Jianghua & Wang, Chongyu & Lin, Zhenjia, 2023. "High-dimension tie-line security regions for renewable accommodations," Energy, Elsevier, vol. 270(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cerrato, Mario & Kim, Hyunsok & MacDonald, Ronald, 2015. "Microstructure order flow: statistical and economic evaluation of nonlinear forecasts," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 39(C), pages 40-52.
    2. Mulder, Arjen & Tims, Ben, 2018. "Conditioning carry trades: Less risk, more return," Journal of International Money and Finance, Elsevier, vol. 85(C), pages 1-19.
    3. Martin D. D. Evans(Georgetown University and NBER) and Richard K. Lyons(U.C. Berkeley and NBER, Haas School of Business), 2005. "Exchange Rate Fundamentals and Order Flow (July 2004)," Working Papers gueconwpa~05-05-03, Georgetown University, Department of Economics.
    4. Breedon, Francis & Pétursson, Thórarinn G. & Vitale, Paolo, 2023. "The currency that came in from the cold: Capital controls and the information content of order flow," Journal of International Money and Finance, Elsevier, vol. 138(C).
    5. Bianco, Vincenzo & Scarpa, Federico, 2018. "Impact of the phase out of French nuclear reactors on the Italian power sector," Energy, Elsevier, vol. 150(C), pages 722-734.
    6. Yutaka Kurihara, 2015. "Are Japanese Stock Prices Important Deterministic Elements of Exchange Rate Returns?," Bulletin of Applied Economics, Risk Market Journals, vol. 2(2), pages 1-9.
    7. K. Bień-Barkowska, 2013. "Informed and uninformed trading in the EUR/PLN spot market," Applied Financial Economics, Taylor & Francis Journals, vol. 23(7), pages 619-628, April.
    8. Martin D. D. Evans & Richard K. Lyons, 2017. "Do Currency Markets Absorb News Quickly?," World Scientific Book Chapters, in: Studies in Foreign Exchange Economics, chapter 12, pages 477-505, World Scientific Publishing Co. Pte. Ltd..
    9. repec:uts:finphd:39 is not listed on IDEAS
    10. Sarid, A. & Tzur, M., 2018. "The multi-scale generation and transmission expansion model," Energy, Elsevier, vol. 148(C), pages 977-991.
    11. Chelley-Steeley, Patricia L. & Tsorakidis, Nikos, 2013. "Bid-ask spread dynamics in foreign exchange markets," International Review of Financial Analysis, Elsevier, vol. 29(C), pages 119-131.
    12. Martin D. D. Evans & Dagfinn Rime, 2017. "Order Flow Information and Spot Rate Dynamics," World Scientific Book Chapters, in: Studies in Foreign Exchange Economics, chapter 17, pages 725-776, World Scientific Publishing Co. Pte. Ltd..
    13. Tiago Pinto & Mohammad Ali Fotouhi Ghazvini & Joao Soares & Ricardo Faia & Juan Manuel Corchado & Rui Castro & Zita Vale, 2018. "Decision Support for Negotiations among Microgrids Using a Multiagent Architecture," Energies, MDPI, vol. 11(10), pages 1-20, September.
    14. Danielsson, Jon & Love, Ryan, 2004. "Feedback trading," LSE Research Online Documents on Economics 24760, London School of Economics and Political Science, LSE Library.
    15. Viet Hoang Nguyen & Yongcheol Shin, 2011. "Asymmetric Price Impacts of Order Flow on Exchange Rate Dynamics," Melbourne Institute Working Paper Series wp2011n14, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    16. Engel, Charles, 2014. "Exchange Rates and Interest Parity," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 453-522, Elsevier.
    17. Mohseni, Soheil & Brent, Alan C. & Kelly, Scott & Browne, Will N., 2022. "Demand response-integrated investment and operational planning of renewable and sustainable energy systems considering forecast uncertainties: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    18. Angelo Ranaldo & Paul Söderlind, 2010. "Safe Haven Currencies," Review of Finance, European Finance Association, vol. 14(3), pages 385-407.
    19. Cepoi, Cosmin-Octavian & Anghel, Dan-Gabriel & Pop, Ionuţ Daniel, 2021. "Asymmetries and flight-to-safety effects in the price discovery process of cross-listed stocks," Economic Modelling, Elsevier, vol. 98(C), pages 302-318.
    20. Lock, Eduardo & Winkelried, Diego, 2015. "Flujos de órdenes en el mercado cambiario y el valor intrínseco del Nuevo Sol," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 29, pages 33-54.
    21. Martin D. D. Evans, 2017. "Order Flows and the Exchange Rate Disconnect Puzzle," World Scientific Book Chapters, in: Studies in Foreign Exchange Economics, chapter 15, pages 599-643, World Scientific Publishing Co. Pte. Ltd..

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:energy:v:168:y:2019:i:c:p:1181-1191. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.