The paper describes a practical approach to implementing the congestion cluster pricing method as a viable congestion management system (CMS) in the operation of electric power systems.
First, the congestion cluster pricing method is described as an attractive choice for the CMS, which efficiently allocates the existing transmission capacities to various system users.
Then, the congestion cluster pricing method is formulated as a stochastic optimization problem of the cluster design. In the formulation the performance of the pricing method is introduced as a measurable function of cluster design, based on the conceptual criteria necessary for an effective CMS. We divine the search space from which a particular design may be selected. Following the formulation the stochastic elements to the optimization problem are discussed by developing suitable representation of various uncertainties in the system. It is shown that the complexity of the problem leads to the search based method as the preferred option for solving for the optimal cluster design. However, because of the high degree of the stochastic nature and because of the large size of the search space, direct application of the search based method to the problem is not feasible.
Finally, some reasonable approximations are suggested to solving the problem thus making it a practical approach to implementing the congestion cluster pricing method. A numerical example is given to illustrate the proposition.