OPF tools for optimal pricing and congestion management in a two sided auction market structure

Paolo Marannino, Riccardo Vailati, Fabio Zanellini, Ettore Bompard, George Gross

Research output: Chapter in Book/Report/Conference proceedingConference contribution


This paper presents the application to large-scale systems of a new OPF model, which is characterized by the introduction of a two sided auction market structure, with power demand elasticity. This means that the load demand is no longer fixed and each customer presents a demand bid, giving the ISO additional degrees of freedom in managing congestion conditions. The use of the OPF is envisaged in a pool model where the Independent System Operator (ISO) has a centralized dispatch function and he is also responsible for the security and the quality of operation. The ISO runs an OPF to determine the optimal solution, taking into account the network constraints; the byproducts of this optimization are the electricity prices at each bus of the network. In the competitive environment the opening of the transmission system to the market players is leading more than in the past to congestion conditions, with electricity price volatility and price spikes. In the work we show the capability of the OPF based on a two sided auction structure to furnish to the ISO a solution that reduce nodal price volatility and allows the congestion relief. A CIGRE 63-bus test system with 5 areas is adopted for an easy comprehension of the usability of the proposed tool. Besides, some important analyses of different scenarios of the Italian market are examined. The results of the investigation put in evidence the presence of bottlenecks in the transmission system in some of the border areas, which limit the TTC of the interconnection with the UCTE networks. The economic signals provided by the nodal price distribution and by the congestion costs are envisaged as useful tools for the Italian ISO (GRTN), Market Administrator (PX or GME) and market players for planning, operational planning and short term operation.

Original languageEnglish (US)
Title of host publication2001 IEEE Porto Power Tech Proceedings
Number of pages7
StatePublished - Dec 1 2001
Event2001 IEEE Porto Power Tech Conference - Porto, Portugal
Duration: Sep 10 2001Sep 13 2001

Publication series

Name2001 IEEE Porto Power Tech Proceedings


Other2001 IEEE Porto Power Tech Conference


  • Competitive electricity markets
  • Congestion management
  • Congestion prices
  • Demand elasticity
  • Nodal prices
  • Pool model
  • Power system economics

ASJC Scopus subject areas

  • Energy Engineering and Power Technology
  • Fuel Technology


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