Investigation of harmonic effects in locational marginal pricing and development of a framework for LMP calculation

Locational Marginal Pricing (LMP) is arguably the most effective and commonly employed mechanism to provide the most reliable economic signal to market participants. Meanwhile, nodal prices depend on active power losses and transmission congestion which may be affected by harmonics pollution. In the conventional method, power system and loads are assumed linear and nodal prices are obtained by results of optimal power flow (OPF) at the power frequency. Harmonics lead to skin effect and increasing loss. Further, harmonic flowing in branches in a power network occupies transmission capacity. For providing more accurate signals to market participants and achieving more accurate nodal prices, harmonic effects on LMP are investigated and a framework is developed for LMP calculation in a harmonic polluted power system. In this framework, skin effect, losses, and congestion which can be arisen by harmonic pollution are modelled in optimal power flow (OPF) and are considered in LMP calculation. The proposed concept is implemented with 9-bus and 30-bus test systems while nodal price changes are also indicated.