Reza Jamalzadeh, Sajjad Abedi, Masoud Rashidinejad et al.
Currently, most ISOs adopt offer cost minimization (OCM) auction mechanism which minimizes the total offer cost, and then, a settlement rule based on either locational marginal prices (LMPs) or market clearing price (MCP) is used to determine the payments to the committed units, which is not compatible with the auction mechanism because the minimized cost is different from the payment cost calculated by the settlement rule. This inconsistency can drastically increase the payment cost. On the other hand, payment cost minimization (PCM) auction mechanism eliminates this inconsistency; however, PCM problem is a nonlinear self-referring NP-hard problem which poses grand computational burden. In this paper, a mixed-integer nonlinear programing (MINLP) formulation of PCM problem are presented to address additional complexity of fast-growing penetration of Vehicle-to-Grid (V2G) in the price-based market clearing problem, and a solution method based on the generalized benders decomposition (GBD) is then proposed to solve the V2G-integrated PCM problem, and its favorable performance in terms of convergence and computational efficiency is demonstrated using case studies. The proposed GBD-based method can handle scaled-up models with the increased number of decision variables and constraints which facilitates the use of PCM mechanism in the market clearing of large-scale power systems. The impact of using V2G technologies on the OCM and PCM mechanisms in terms of MCPs and payments is also investigated, and by using numerical results, the performances of these two mechanisms are compared.