European Day-Ahead Market Clearing Model Incorporating Linearized Ac Power Flow Constraints

A model for the solution of a European-type day-ahead market with multi-period products is presented in this paper, though considering a nodal network representation and including N and N-1 transmission security constraints. An iterative process is employed, similar to the process implemented in the U.S. markets, coordinating a market clearing problem (formulated as a Mixed Integer Linear Programming-MIP model) with an AC load flow solution, in order to check the apparent power flows of transmission lines against their respective limits, accounting the influence of voltage magnitudes and reactive power on the system lines' power flows. A distributed-slack modelling is used, in order to ensure the robustness of the attained Locational Marginal Prices, so that they are independent of the selection of the system reference node. The model is evaluated in terms of pricing and computational efficiency using the Balkan nodal power system.