1 Use of Facts Devices for Congestion Management in a Liberalized Electricity Market Ch. Schaffner, G. Andersson Swiss Federal Institute of Technology (ETH), Zurich, Switzerland Summary - This paper presents an overview over dif- ferent areas where Flexible AC T ransmission S ystems (FACTS) devices can improve transmission system effi- ciency especially under the consideration of liberalized electricity markets. Furthermore, a network example, based on realistic data, is shown where the installation of a thyristor c ontrolled s eries c apacitor (TCSC) in- creases the transfer capacity into a region considerably while maintaining security margins. This can help to reduce or even eliminate congestion in a transmission network. Keywords - FACTS, congestion management, liberal- ized electricity market, available transfer capability (ATC), TCSC. 1. INTRODUCTION In a liberalized electricity market, the transmission ca- pability of a transmission system is of an economical value to the network company. This company has a natural monopoly combined with the commission to maximize the benefit for its customer while giving a reasonable profit to its owners. Due to physical con- straints in the surrounding network, the lines are often only utilized at a fraction of their individual limits. To improve customer benefit one possibility would be to add to the value of the transmission lines by increasing the amount of transported energy over these lines. Ad- ditionally, there will be a gain in overall market effi- ciency since more energy trading can take place be- tween competing regions with different price structures. Flexible AC T ransmission S ystems (FACTS) devices allow the increase of the overall utilization of an electri- cal power network by controlling the power flow. Since installations of FACTS devices require huge in- vestments with costs similar to new transmission lines (see [1]) the effect of higher transfer capability only, can not necessarily justify these new installations. There- fore, it is evident that one has to consider all possible aspects, that add to the value of FACTS devices in a transmission system: static and dynamic stability, in- creased transfer capability, increased system reliability, regained controllability over the power flow for Inde- pendent System O perators (ISO) or T ransmission S ys- tem Operators (TSO) in a liberalized electricity market, and the possibility of relocation. The paper is divided into three sections: First, we will give a systematic overview over all areas where con- trollable devices such as FACTS can contribute to the value of an electric transmission system. Second, the aspects of congestion relief will be illustrated in an ex- ample based on a “real-world” problem in the field of inter-regional electricity transmission. In the third sec- tion the results of the analysis of the problem described in the example will be given. Apart from the quantita- tive simulation results, we will also discuss qualitative issues that may add to the value of controllable devices. The paper presents results of an ongoing research pro- ject in the area of the value of controllable devices in a liberalized electricity market. Finally, we discuss the future work to be carried out on this topic. 2. THE VALUE OF FACTS DEVICES Except for static V AR c ompensators (SVCs) FACTS technology is very young. SVCs are installed in many places all over the world since they offer an economic way to flexibly compensate long lines interconnecting distant regions. But even if not many of the other FACTS devices - such as unified power flow controller (UPFC) or controlled series capacitors (CSC) - are in- stalled today there will definitely be an increasing de- mand for controllable devices in the new electricity