Distribution Locational Marginal Pricing for Active Network Management Considering High Penetration of Distributed Energy Resources

Abstract

This paper presents a distribution locational marginal pricing (DLMP) approach for integrating high penetration of distributed energy resources (DER) in a competitive market environment. A hierarchical market structure at distribution-level is proposed for facilitating the market penetration of DERs. The DLMP method is implemented to incentivize DERs to provide services in active network management. The market clearing problem and the calculation of DLMP are based on an AC optimal power flow (ACOPF) model. Then, we propose a scenario analysis to evaluate the contribution of DLMP in hosting DERs. A numerical simulation is conducted to illustrate the effectiveness and feasibility of the proposed method.