Optimal Power Flow for LCC and VSC-based HVDC Interconnected Systems in Electricity Market

As High Voltage Direct Current (HVDC) transmission systems expand globally, accurate modeling for power system operation and electricity market analysis becomes critical. Current electricity markets, including MISO, employ Direct Current Optimal Power Flow (DC OPF) with HVDC modeled as a transportation model—a simplification that fails to capture HVDC's characteristics. This study evaluates the adequacy of current market modeling by comparing it with Hybrid OPF, which explicitly incorporates the electrical characteristics of Line Commutated Converter and Voltage Source Converter based HVDC systems. Using the Jeju power system interconnected via HVDC lines, single-period OPF simulations reveal substantial differences: HVDC power flows differ by up to 257MW with reversed flow directions in some cases, and whether and where transmission congestion occurs differs significantly. Under high-load scenarios, these modeling differences lead to altered generator commitment decisions, total generation costs varying by 1.03%, and distinct locational marginal price distributions. The findings demonstrate that transportation-model-based DC OPF may inadequately represent actual power flows in HVDC-interconnected systems, particularly under congested conditions. This study provides evidence on the practical validity and limitations of current market modeling practices, suggesting Hybrid OPF necessity for accurate system operation analysis and reliable market outcomes.