Abstract

Background: This paper investigates the impacts of uncertainties on flow-gate marginal pricing (FMP) as an efficient tool for analyzing financial transmission rights (FTR) in deregulated electricity markets.

Methods: The proposed method provides a mathematical formulation for optimal power flow (OPF) and FMP is defined through OPF. Several parameters in electric power systems are modeled as probability distribution function (PDF) and Monte-Carlo simulation (MCS) is utilized to cope with the uncertainties. In order to indicate the priority of the parameters on FMP, sensitivity analysis is carried out and the priority list is derived.

Conclusion: Many analyses and assessments demonstrate that network uncertainty makes great impacts on FMP and it is inevitable to include such uncertainties in FMP calculations. Results also emphasize the major effects of FMP in electric power systems under deregulated environments.

Keywords: Congestion, deregulated market, financial transmission right, flow-gate marginal pricing, parameters, sensitivity.

Graphical Abstract