The significant economic growth in Taiwan has led to a substantially higher rate of electricity consumption. However, political decisions and environmental considerations also have created increased pressure on the expansion of generation plans and power grids. For the special situation in Taiwan demonstrating a serious imbalance between power consumption area in the north and electricity generation located in the south, considerable congestions in power transmission from south to north often occur during peak load periods in summer. Therefore, to adopt reasonable and suitable methods of congestion management is currently an important issue. This is especially true for the undergoing situation of the Taiwan power market deregulation. In this study, we firstly review the congestion management methods used by renowned foreign Independent System Operator, including NGC in Great Britain, Cal-ISO and PJMISO in USA, and NEMMCO in Australia. Secondly, we introduce a three-phased transitional process for the deregulation of Taiwan power market. Finally, we propose efficient congestion management methods for each stage of the deregulation process. In the first stage, we suggest the continuous use of the current internal process management of Taipower company but supplementing with an incentive mechanism. Contract-based central dispatch and counter flow methods are recommended for the second stage in which the ISO would be established. When the power market is fully deregulated in the third stage, we recommend the use of locational marginal pricing or nordal pricing methods to manage transmission bottlenecks occurring on the power grid.
