In power systems, transmission network provides the infrastructure to support a competitive electricity market, but congestion occurs frequently in the weakly connected networks. Transmission congestion can enhance the locational market power in the congested area and weaken the efficiency of electricity market. In this paper market dispatch problem in the pool-based electricity market is formulated so as to maximize the social welfare of market participants subject to operational constraints given by real and reactive power balance equations, and security constraints in the form of apparent power flow limits over the congested transmission lines. The comparisons of the real and reactive power costs of generators, benefit value of consumers, producers surplus, locational marginal prices (LMPs) under uncongested or congested conditions are evaluated by using a five-bus system.

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