Transmission Expansion Planning in Deregulated Power ... - tuprints

3 Probabilistic Locational Marg**in**al Prices

In regulated power systems, probabilistic load flow is used to model the random uncerta**in**ties

**in** transmission expansion plann**in**g [9]-[11]. Probabilistic load flow computes PDFs of l**in**e

flows and bus voltages based on PDFs of loads. In regulated power systems transmission

expansion plann**in**g is carried out based on the technical criteria such as probability of

violation l**in**e flow limits and bus voltage limits. In deregulated power systems **in** addition to

the technical criteria, market based criteria are needed to achieve the objectives of

transmission expansion plann**in**g **in** deregulated power systems. Therefore, it is needed to

compute the PDFs of variables which show the performance of electric market. This thesis

proposes to use PDFs of nodal prices for assess**in**g electric market performance. In this

chapter a probabilistic tool for comput**in**g PDFs of nodal prices is **in**troduced [67]-[68].

This chapter is organized as follows. In section 3.1, the concept of locational marg**in**al prices

is described and a mathematical model for comput**in**g nodal prices is presented. In section 3.2,

a probabilistic tool, which is named “probabilistic locational marg**in**al prices”, is presented for

electric market analysis. The presented approach is applied to an 8-bus network **in** section 3.3.

3.1 Locational Marg**in**al Prices

Nodal pric**in**g is a pric**in**g system for purchas**in**g and sell**in**g electric energy **in** deregulated

power systems. In nodal pric**in**g a price is determ**in**ed for each transmission node or bus. In

this pric**in**g system, all consumers purchase energy at the price of their load bus and all

producers sell energy at the price of their generator bus. By def**in**ition nodal price or

locational marg**in**al price (LMP) is equal to the "cost of supply**in**g next MW of load at a

specific location, consider**in**g generation marg**in**al cost, cost of transmission congestion, and

losses" [62], [64]. Cost of marg**in**al losses is not implemented currently. Figure 3.1 shows the

components of LMP. On the other word, LMP of bus i is the additional cost for provid**in**g 1

MW additional power at this bus. The marg**in**al cost of provid**in**g electric energy at a specific