Actual social welfare maximization in pool market

Under competitive environment of the pool market, the market clearing price (MCP), and the generation and demand of all bidders are normally determined to obtain maximum social welfare. However, the MCP is normally different from the nodal prices which are actually charged to, or paid for, participants. Therefore the solution obtained from the above concept does not actually provide maximum return to the system. In this paper, we propose an energy dispatch methodology based on nodal prices of the determined generation and demand to achieve the actual maximum social welfare. Network constrained economic dispatch based on linear programming technique with full AC Newton-Raphson power flow is employed to solve the problem which can take into account both elastic and inelastic demand bidding. The proposed method has been applied to the IEEE 30-bus test system and satisfactory results are obtained.