Analysis of Locational Marginal Pricing Approach for a Deregulated Electricity Market

Analysis of Locational Marginal Pricing Approach for a Deregulated Electricity Market

A Abirami, T R Manikandan

A Abirami, T R Manikandan "Analysis of Locational Marginal Pricing Approach for a Deregulated Electricity Market" Published in International Journal of Trend in Research and Development (IJTRD), ISSN: 2394-9333, Volume-3 | Issue-1 , February 2016, URL:

In a deregulated power industry, estimation of power price and management of congestion is a major issues handled by market members. Modeling of sensible pricing structure of power systems is important to provide financial signals for electrical utilities. In restructured electricity markets, a valuable transmission pricing method is required to compact with transmission issues and to generate exact economic signals to condense the generation cost. It is essential to build up a suitable pricing scheme that can offer the valuable information to market users, such as generation companies, transmission companies and customers. These pricing depends on generator bids, load levels and transmission network constraints. Transmission line constraints can result in deviation in energy prices all over the network. Managing of Congestion is one of the major problem in deregulated electricity pricing with the enhance of complexity to the system. Spot Pricing or Locational Marginal Pricing is a prevailing approach in energy market operation and planning to identify nodal prices and manage congestion in transmission systems. Locational Marginal Pricing (LMP) obtains from the optimal power flow problem gives the economic value of electrical energy at each location. Proposed approach is based on DC optimal power flow model with and without considering of losses. To solve this LMP problem optimization based Quadratic Programming (QP) approach has been implemented. In this paper LMP values with normal condition, congestion condition, and marginal loss condition are studied. IEEE 14 bus and 30 bus system are used as the test system in this paper.

Locational Marginal Pricing (LMP), DC Optimal Power Flow (DCOPF),Quadratic Programming (QP),Marginal Loss Price,Generation Shift Factor(GSF), Loss Factor

Volume-3 | Issue-1 , February 2016


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