Decentralized Congestion Management for Multilateral Transactions Based on Optimal Resource Allocation

Abstract—This paper proposes a decentralized model for dc load flow based congestion management for the forward markets via Optimal Resource Allocation (ORA). The available thermal capac-ities of possible congested transmission lines are considered as com-monly shared resources for all bilateral and multilateral transac-tions in the market. In our model, each transaction maximizes its profit under the limits of transmission line capacities allocated by the ISO. The ISO searches the optimal allocation of line capaci-ties to each transaction. Finally, the same market efficiency (social welfare) as centralized optimization can be reached. The ORA-based decentralized approach is more suitable for power market environment, since it always keeps the intermediate solution fea-sible during the iterations and does not require each transaction to submit their private and sensitive information. The mathematical model, computation procedure and relevant proof are presented. The computer test results from the IEEE 30 bus system illustrate the effectiveness of proposed approach. Index Terms—Congestion management, decentralized optimiza-tion, optimal resource allocation, power market. I