  The price of solar panels is decreasing rapidly and governments around the
world are investing in solar power plants to increase the portion of solar
energy in the smart grid. The price of electricity produced by solar power
plants is much cheaper than conventional thermal power plants and innovation in
solar cells is further increasing the divide. Consequently, setting up solar
power plants will decrease electricity spot prices on average. However, the
topology of the power grid must be considered while setting up solar power
plants so that full benefits of cheap solar power can be gained by all
consumers. In this paper we will calculate day-ahead spot prices using
conventional generators. Then one of the generators will be replaced by a
photovoltaic generator and effects on day-ahead market will be analyzed. Total
cost of electricity generated at each hour in a day using conventional power
plants and solar power plants will be compared. The effects of line congestion
on the benefits of solar power to end customers will be analyzed by comparing
nodal prices. The optimization problems related to generator scheduling and
day-ahead markets will be solved using Dynamic Programming, Mixed Integer
Linear Programming (MILP) and Karush-Kuhn-Tucker (KKT) method for convex
optimization.
