Congestion

Congestion Rent

Revenue collected by the system operator from LMP differences caused by binding transmission constraints

Locational Marginal Price (LMP)

"Price at a location reflecting the cost to serve one more MW of load there (includes energy

LMP energy component

"System-wide marginal energy cost (identical at all nodes

LMP congestion component

"Part of LMP reflecting the cost of transmission constraints (positive on the expensive side of a constraint)"

LMP loss component

"Part of LMP accounting for marginal transmission losses (higher at nodes far from generation)"

Binding constraint

"Transmission limit reached in dispatch (no slack)

Non-binding constraint

"Transmission limit not reached in dispatch (has slack)

Shadow price (constraint)

"Value (Lagrange multiplier) of relaxing a constraint by one unit in dispatch; equal to the congestion component of LMP for that constraint"

Power Transfer Distribution Factor (PTDF)

"Fraction of a power transfer from one node to another that flows through a particular line (percentage of the transfer)"

PTDF example

"Example: If 100 MW is transferred from Bus A to B and 20 MW flows on Line X

Line Outage Distribution Factor (LODF)

"Fraction of power flow that shifts to a line when another specified line is out of service"

Flowgate

"Transmission element or set of elements identified as limiting the amount of power that can be transferred"

Interface (transmission)

"Defined set of circuits between two areas with a specified transfer capacity (limit on power exchange)"

Congestion forecasting

"Predicting future transmission constraints using data (load

Deterministic forecast

"Prediction that provides a single best estimate (no uncertainty) of a future value (e.g. congestion level)"

Probabilistic forecast

"Prediction that provides a probability distribution of future outcomes (e.g. congestion probabilities)

Security-Constrained Economic Dispatch (SCED)

"Market algorithm finding lowest-cost real-time dispatch subject to security constraints (ensuring reliability)"

Security-Constrained Unit Commitment (SCUC)

"Day-ahead optimization scheduling which units to commit to meet demand and reserves at least cost under security constraints"

Redispatch

"Short-term adjustment of generation schedules (ordered by the system operator) to relieve unexpected congestion"

Counterflow

"Power flow arranged opposite the direction of a congested path (injecting on the high-price side

Financial Transmission Right (FTR)

"Financial contract entitling the holder to the difference in locational prices (congestion cost) between two points"

Auction Revenue Right (ARR)

"Financial entitlement allocated to customers granting a share of congestion revenue (from FTR auctions) to hedge transmission costs"

Congestion hedging

"Using FTRs

Nodal (locational) pricing

"Pricing method with a unique price at each node

Zonal pricing

"Pricing method with a single price for a group of nodes (zone)

Congestion cost allocation

"Rules for assigning the costs of congestion (e.g. redispatch costs) to market participants or load (often based on usage or nodal prices)"

Transmission constraint

"Physical limit (thermal

Marginal loss

"Additional transmission loss incurred by delivering one more unit of power to a location"

Marginal congestion cost

"Additional system cost caused by one more MW flowing on a congested path (equal to the congestion component of LMP)"

Congestion relief actions

"Measures taken to reduce congestion

Congestion hours

"Number of hours in which at least one transmission constraint was binding (indicating congestion occurred)"

Congestion Severity Index

"Metric combining the magnitude and duration of congestion (e.g. sum of congestion prices over time) to quantify severity"

SCADA (Supervisory Control And Data Acquisition)

"System that collects real-time grid data (flows

EMS (Energy Management System)

"Software platform using SCADA data to monitor

Market settlements data

"Information on cleared schedules

Root Mean Square Error (RMSE)

"Square root of the average of squared forecast errors; measures accuracy of predictions (penalizes large errors)"

Mean Absolute Error (MAE)

"Average of absolute differences between forecasted and actual values; measures average forecast error"

Scenario analysis

"Studying how different hypothetical conditions (varying load

Sensitivity analysis

"Evaluating how changes in inputs (load

Contingency analysis (N-1)

"Simulating each single-element (line/generator) outage to ensure the system operates securely with any one element out"

Ramp constraint

"Limit on how fast a generator’s output can change (ramp up or down) between time intervals"

Market power (congestion)

"Ability of a generator to influence prices by leveraging a constrained transmission path (e.g. withholding capacity)"

Curtailment

"Reduction of scheduled generation output (often mandated by operators) to relieve over-generation or transmission constraints"

Congestion Revenue Right (CRR)

"Financial right (similar to an FTR) in some markets that entitles the holder to congestion payments between two locations"

Congestion management

"Set of processes (market clearing

Optimal Power Flow (OPF)

"Mathematical optimization finding least-cost generation dispatch while meeting demand and satisfying network constraints"

Available Transfer Capability (ATC)

"Amount of additional power that can be scheduled on a transmission path without violating limits

Transmission Reliability Margin (TRM)

"Portion of transfer capability reserved to ensure reliability (accounting for uncertainty)

Power flow

"Electrical flows on network lines determined by injections/withdrawals

Tie line

"Transmission line connecting two control areas or regions (often subject to interface transfer limits)"

Unscheduled flow (loop flow)

"Power flowing over an interface not matching scheduled interchange

Loop flow

"Flows that travel on alternate paths through neighboring networks because of meshed grid connections (often unscheduled)"

Over-generation

"Condition where total generation exceeds demand (often from renewables)

Price separation

"Difference in LMP between two locations caused by a transmission constraint between them"

Line rating

"Maximum safe power flow on a transmission line (thermal or stability limit) under specified conditions"

Load forecast

"Prediction of future electricity demand used in planning and market scheduling"

Shadow price example

"If a binding constraint has a shadow price of $10

Congestion cost example

"If LMP is $30 at injection and $40 at withdrawal due to a constraint

Constraint slack

"Difference between a transmission limit and the actual flow; positive slack means the constraint is non-binding"

Dual variable

"Value associated with a constraint in optimization (same as the shadow price) indicating the marginal cost of relaxing the constraint"

Independent System Operator (ISO)

"Entity that operates the transmission grid and runs the electricity market in a region (e.g.

Regional Transmission Organization (RTO)

"Organization similar to an ISO that manages the transmission network and market over multiple states or areas"

Constrained dispatch

"Generation schedule resulting from binding constraints

DC power flow

"Simplified linear power flow model ignoring reactive power

AC Optimal Power Flow (AC-OPF)

"Nonlinear optimization of dispatch considering full AC power flow equations for accurate flow and loss modeling"

N-0 condition

"Power system state under no-contingency (base case)

Marginal Loss Factor (MLF)

"Multiplier applied to energy deliveries at a location to account for incremental losses when computing LMP"

Transmission usage charge

"Fee charged for using the transmission network

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