Copyright © 2009 Seyed Abbas Taher and Ali Akbar Abrishami. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
We deal with the effect of Unified Power Flow Controller (UPFC) installation on the objective function of an electricity market. Also this paper proposes a Novel UPFC modelling in OPF which facilities the consideration of the impact of four factors on power market. These include the series transformer impedance addition, the shunt reactive power injection, the in-phase component of the series voltage and the quadrature component of the series voltage. The impact of each factor on the electricity market objective function is measured and then compared with the results from a sensitivity approach. The proposed sensitivity approach is fast so it does not need to repeat OPF solutions. The total impacts of the factors are used to offer UPFC insertion candidate points. It is shown that there is a clear match between the candidate points of the sensitivity method and those proposed by the introduced UPFC modelling in our test case. Furthermore, based on the proposed method, the relation between settings of UPFC series part and active and reactive power spot prices is presented.