Improvement of Demand Side Management and Social Welfare Index Using a Flexible Market-Based Approach

A sufficient amount of reactive power support is necessary due to control the voltage level, free up transmission lines capacity, prevent from voltage collapse, and maintain power systems stability and reliability. So, sufficient levels of the reactive power ask for the presence of an appropriate structure for pricing and clearing of the reactive power in power markets. In this article, a new clearing method for the separate reactive power market (SRPM) is presented. The proposed method aims at enhancing the social welfare index, improving the demand-side management, controlling the market power potential and decreasing destructive effects of market players’ collusion, simultaneously. To analyze the performance of the proposed clearing method, different conditions of the power network including the peak load of the network, the presence of private sensitive loads and multilevel tariffs of the demand has been developed. The proposed method is tested on the 24-bus IEEE reliability test system (RTS) and is solved by a genetic algorithm (GA) with MATLAB. Also, the nondominated sorting genetic algorithm (NSGA-II) is used to carry out a comparison with the results of the GA method in similar situations. The results provided by the proposed clearing method is compared to the one in the conventional clearing method to evidence that the proposed market clearing method significantly improves the flexibility of the power market clearing.