The Impact of TCSC on Transmission Costs on Wholesale Power Markets in Terms of Bilateral Transactions and Active Power Reserves

In the electricity market operation, calculating transmission charges is a critical issue. Transmission costs relate to the issue of how much is paid and by whom, for the use of transmission system. For short-run transmission charges, difference of location marginal prices (LMP) on a network branch has much influence on the market participants, including bilateral transactions. When there is congestion in power systems, difference of locational marginal prices on the branch becomes bigger. One of the measures to overcome network congestion is using thyristor controlled series capacitor (TCSC). In addition, the presence of price-sensitive loads, bilateral transactions and requirement of active power reserves in power systems complicate matters associated with transmission charges in the wholesale electricity market. In this paper, a method for determining the optimal location of TCSC has been suggested and the impact of TCSC compensation levels to transmission charges of bilateral contracts and total social welfare (SW) on the wholesale electricity market is analyzed. The calculated results are illustrated on a 6-bus system