Locational marginal pricing basics for restructured wholesale power markets
Authors:
- 1 July 2009
- conference paper
- Published by Institute of Electrical and Electronics Engineers (IEEE)
- No. 19325517,p. 1-8
Abstract
Although locational marginal pricing (LMP) plays an important role in many restructured wholesale power markets, the detailed derivation of LMPs as actually used in industry practice is not readily available. This lack of transparency greatly hinders the efforts of researchers to evaluate the performance of these markets. In this paper, different AC and DC optimal power flow (OPF) models are presented to help understand the derivation of LMPs. As a byproduct of this analysis, the paper provides a rigorous explanation of the basic LMP and LMP-decomposition formulas (neglecting real power losses) presented without derivation in the business practice manuals of the U.S Midwest Independent System Operator (MISO).Keywords
All Related Versions
This publication has 20 references indexed in Scilit:
- Usefulness of DC power flow for active power flow analysis2005
- A market simulation program for the standard market design and generation/transmission planning2004
- Marginal Loss Modeling in LMP CalculationIEEE Transactions on Power Systems, 2004
- A comparison of the AC and DC power flow models for LMP calculations2004
- Experience with PJM market operation, system design, and implementationIEEE Transactions on Power Systems, 2003
- A review of selected optimal power flow literature to 1993. I. Nonlinear and quadratic programming approachesIEEE Transactions on Power Systems, 1999
- A security-constrained bid-clearing system for the New Zealand wholesale electricity marketIEEE Transactions on Power Systems, 1998
- Advanced pricing in electrical systems. II. ImplicationsIEEE Transactions on Power Systems, 1997
- Advanced pricing in electrical systems. I. TheoryIEEE Transactions on Power Systems, 1997
- System planning tools for the competitive marketIEEE Computer Applications in Power, 1996