Transmission Expansion Planning in Deregulated Power ... - tuprints

3 Probabilistic locational Marginal Prices 16
LMP
node depends on:
• marginal cost of generators,
• operating point of the system, and
• transmission network constraints.
Fig. 3.1 – Components of LMP
Using nodal pricing, customers buy and sell energy at the actual price of delivering energy to
their buses. This pricing system encourages an efficient use of transmission system by assigning
prices to users based on the physical way that energy is actually delivered to their buses.
3.1.1 Bidding Procedure
In deregulated power systems, ISO dispatches the generators so that to meet the demand of
loads at the minimum cost while maintaining security and service quality of power system.
ISO compute LMPs by running optimal power flow. Bidding process for a specified period,
e.g. next two hours, is as below.
• Every producer submits the following values to ISO:
o Minimum and maximum power which can deliver to the network
o Bid price for selling 1 MW electric power
• Every consumer submits the following values to ISO:
o Minimum and maximum load demand
o Load bid for load curtailment in emergency condition (if LMP of a load exceeds
its bid then the load is curtailed till its LMP reduces to its bid)
• ISO run the optimal power flow and computes the following values:
o MW dispatch of each generator
o MW dispatch of each load
o LMP of each bus
Generation
Marginal
Cost
Transmission
Congestion
Cost
= +
+
Cost of
Marginal
Losses
The mathematical model for computing LMPs is described in the following subsections.