Optimal and reliable dispatch of supply and demand bids for competitive electricity markets

This paper presents an optimal dispatch model for competitive electricity markets where independent system operators (ISOs) dispatch real power and ancillary services based on supply offers and demand bids. The model maximizes the "net" societal benefit while respecting various constraints. Zonal market clearing prices are determined and DC power flow equations are used to capture the physics of real power flows. In addition, integer decision variables are used to capture unit's on/off status and automatic generator control (AGC)/load following capability in a reliable way. Each producer is assigned a power flow on each inter-zonal connection and this will be used for accounting purposes. A six zone, 18-unit system is used as a case study with satisfactory results.