This paper proposes a new bid based redispatching method to relieve congestion in a pool type market, based on bilateral generation exchanges between generation units. Sensitivity analysis is used to find and implement the cheapest consecutive bilateral exchanges that would remove congestion in an iterative process. Congestion cost is calculated as exchange cost during congestion removal and is divided between congested parts using load flow results in each iteration. Divided cost is recovered from consumers, based on their relative contributions on congested parts using generalized load distribution factors. IEEE 39 and 118 bus test systems are used for case study to evaluate the merits of proposed method and the results are discussed in comparison with other conventional methods.

Demand response (DR) and flexible AC transmission system (FACTS) devices can be effectively used for congestion management in power transmission systems. However, demand response program (DRP) implementation can itself affect the optimum location of FACTS devices, which is one of the main issues in power system planning.This paper investigates the impact of DRPs on unified power flow controller (UPFC) placement. The harmony search algorithm is employed to determine the optimum locations and parameter setting of UPFC in a long-term framework.The optimization problem is solved with different objectives including generation and congestion cost reduction, as well as loss reduction. In this paper, the proposed approach is analyzed using 5 different cases, which are defined in such a way that they demonstrate the impact of DRPs on the UPFC placement problem. The IEEE reliability test system is used as an illustrative example to demonstrate the necessity of considering DRPs for UPFC placement.