The effects of extended locational marginal pricing in wholesale electricity markets

Author

Thompson, G. ; Chao Li ; Muhong Zhang ; Hedman, Kory W.

Author_Institution

Sch. of Comput., Inf., & Decision Syst. Eng., Arizona State Univ., Tempe, AZ, USA

fYear

2013

fDate

22-24 Sept. 2013

Firstpage

1

Lastpage

6

Abstract

In this paper, two pricing mechanisms in electricity markets are studied, the locational marginal price (LMP) and the extended locational marginal price (ELMP). The effects of these two pricing mechanisms are compared with regards to the allocation of the market surplus between generators and loads. The two pricing mechanisms are also analyzed with regards to the required uplift payments. The results confirm that uplift payments are reduced under the ELMP pricing mechanism. However, ELMP does not appropriately represent the marginal market clearing price for the market dispatch solution.

Keywords

power generation dispatch; power generation economics; power markets; pricing; ELMP; extended locational marginal pricing mechanism; marginal market clearing price; market dispatch solution; market surplus allocation; uplift payment; wholesale electricity market; Economics; Electricity supply industry; Generators; Load flow; Load modeling; Mathematical model; Pricing; Extended locational marginal price; locational marginal price; non-convex markets; pricing mechanisms; uplifts;

fLanguage

English

Publisher

ieee

Conference_Titel

North American Power Symposium (NAPS), 2013

Conference_Location

Manhattan, KS

Type

conf

DOI

10.1109/NAPS.2013.6666921

Filename

6666921