In the operation of a deregulated power system, congestion and power loss are
the two major factors causing price fluctuation in different parts of the network.
In this paper, a new method is proposed for calculating and investing the congestion
surplus. In this method, congestion surplus, which is calculated on the
basis of flow‐gate marginal prices, is used as an economic signal to control the
network. In this regard, different strategies such as the definition of sensitive
buses and priority list of the congested lines are proposed from the perspective
of flow‐gate marginal price concept. In order to verify the novel reformation,
distributed generation planning is presented as an illustrative example. In this
approach, proper investment is applied to increase the social welfare under
new formulation in the presence of distributed generation resources. The proposed
algorithm is implemented on IEEE 30‐bus and IEEE 57‐bus networks.
The results emphasize the accuracy and efficiency of the proposed algorithm
for calculating the congestion surplus and increasing social welfare with the
least amount of investment.