A study on congestion management improvement in ERCOT market

Three methods have been proposed to improve energy deployment efficiency in deregulated power markets. The advantages of adopting shadow price caps include: predefined deployment stop point, predefined adjustable penalty costs, rational and usable prices, and effective deployment. Virtual offer is a practical way to set energy price caps. Virtual offers stop the system from deploying offers that are less efficient than them. Virtual offers have an indirect influence on shadow prices. The limit of virtual offers resides in the fact that deployment of virtual offers does not convey a very clear physical meaning in many cases. Shift factor grouping improves deployment efficiency by eliminating deployments that have too little effect on relieving constraints. Real examples as well as studies are given to compare the pros and cons of the three methods.