Application of the Locational Marginal Pricing Model in North China Grid: A Preliminary Study

For the first time, the locational marginal pricing (LMP) based market model is studied on a Chinese regional market. This paper reports upon preliminary results of applying LMP market design in North China Grid (NCG). Common key features of successful markets are discussed in reference to the existing LMP markets in the U.S. and other countries. As the pricing and dispatch framework of an LMP market, security constrained economic dispatch is applied to the NCG model. The simulation scenarios are designed to simulate the likely Chinese restructuring process of introducing competition gradually. Extensive simulations are performed. Effects of the LMP market based dispatch on NCG system are discussed in terms of grid security, LMPs, average energy costs, and transmission congestions.