Introducing Uncertainty Components in Locational Marginal Prices for Pricing Wind Power and Load Uncertainties

Journal Article · Fri Jan 04 00:00:00 EST 2019 · IEEE Transactions on Power Systems

DOI:https://doi.org/10.1109/TPWRS.2018.2881131· OSTI ID:1492512

Fang, Xin ^[1]; Hodge, Bri-Mathias Scott ^[1]; Du, Ershun ^[2]; Kang, Chongqing ^[2]; Li, Fangxing Fran ^[3]

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1. National Renewable Energy Lab. (NREL), Golden, CO (United States)
2. Tsinghua Univ., Beijing (China)
3. Univ. of Tennessee, Knoxville, TN (United States)

With substantially increasing penetration levels of wind power, electric power system flexibility is needed to address the variability and uncertainty of wind power output. Thus, it has become an urgent issue to obtain an optimal trade-off between economics and reliability, and to price system uncertainties. This paper proposes a new electricity market-clearing mechanism based on locational marginal prices (LMPs) for pricing uncertain generation and load. The uncertainty contained locational marginal price (U-LMP) is derived from a distributionally robust chance-constrained optimal power flow (DRCC-OPF) model in which only the first-order and second-order moments of the uncertain sources' probability distribution are needed. Compared with traditional LMPs, the proposed U-LMP formulation includes two new uncertainty components: transmission line overload uncertainty price and generation violation uncertainty price. These LMP uncertainty components are the price signals reflecting the system costs as a result of wind generation and demand uncertainty at different locations. Finally, using parametric case studies, the relationship among uncertainty levels, system generation cost, and LMP uncertainty components are established. Case studies performed on the PJM 5-bus and IEEE 118-bus systems verify the proposed U-LMP method.

• Research Organization: National Renewable Energy Laboratory (NREL), Golden, CO (United States)
• Sponsoring Organization: USDOE Office of Energy Efficiency and Renewable Energy (EERE), Wind Energy Technologies Office (EE-4WE)
• Grant/Contract Number: AC36-08GO28308
• OSTI ID: 1492512
• Report Number(s): NREL/JA--5D00-70712
• Journal Information: IEEE Transactions on Power Systems, Journal Name: IEEE Transactions on Power Systems Journal Issue: 3 Vol. 34; ISSN 0885-8950
• Publisher: IEEE
• Country of Publication: United States
• Language: English

Related Subjects

24 POWER TRANSMISSION AND DISTRIBUTION
chance constrained optimization
economic dispatch
locational marginal price (LMP)
optimal power flow
uncertainty