Utilizing MATPOWER in Optimal Power Flow

This paper shows how MATPOWER, a MATLAB Power System Simulation Package can be used for optimal power flow (OPF) simulations. MATPOWER is a package of MATLAB files for solving power flow and optimal power flow problems. It is a simulation tool for researchers and educators which is easy to use and modify. An OPF simulation gives the active/reactive power generated and purchased at each bus and the nodal prices. The nodal prices are of special interest because they reflect the marginal generation and load at each bus (node). These prices are also called locational prices and are found to be the optimal prices, maximizing social welfare and taking transmission constraints into account. They can provide the right incentives to market players and to society. When transmission congestion is present this creates market inefficiency, since cheap distant generation may be replaced with more expensive local generation. We are especially interested in OPF as utilized by a centralized dispatcher, and we also describe the features relevant for the Norwegian and Nordic markets. We optimize three cases and analyze the economic consequences of different network topologies and transmission congestion.