Abstract
This paper presents a comparison of Locational Marginal Prices (LMP) and Locational Load Shedding Marginal Prices (LSMP), which are useful parameters for calculation of trading of active power in a deregulated power market. These parameters or indexes are well pictured through DC Optimal power flow (DC-OPF) and Shift factor (SF) method formulations, which are explained in a four bus system by taking the congestion management strategies to calculate the LMPs and LSMPs, solved by optimization techniques very similar to reverse form of Economic Dispatch (ED) problems. Non-linear constrained optimization problem relate to the load shedding problems. The LMPs and LSMPs which are calculated in the four bus test system are functions of active power. The LMP and LSMP curves reveal the practical advantages of the proposed index for the real-time problems in a competitive power market.
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