SCUC-based optimal power tracing approach for scheduling physical bilateral transactions and its verification via an integrated power-money flow analysis

This study discusses a security-constrained unit commitment (SCUC) based optimal power tracing approach, which adopts the proportional power tracing method to trace power flows of the network for simultaneously satisfying physical contract paths and financial contract quantities of bilateral transactions. Thus, optimal solutions of the proposed model, including unit commitment and generation dispatch of generators and angle statuses of phase shifters, would simultaneously meet physical and financial requirements of bilateral transactions, and in turn reduce the impacts of loop flows induced by bilateral transactions to third parties of the networked system. The proposed model is a mixed integer non-linear programming problem because of the non-linear proportional power tracing constraints, and the revised outer approximation algorithm is discussed to effectively solve the problem. The effectiveness of the proposed model is further evaluated via an integrated power-money flow analysis, based on the locational marginal price based energy payments and the min-max fairness policy based transmission usage charges. Numerical case studies show that the proposed model, as compared with traditional financial bilateral transaction models, presents potential advantages to avoid loop flows and reduce the impacts to third parties in terms of energy and transmission usage payments.