Impact of DG on locational marginal price under multi constrained environment

Abstract

During the nineties decade, many electric utilities and power network companies all around the world intended to change their mode of operation and business, from vertically integrated structure to open market systems. The power sector is evolving into a distributed and competitive industry in which market forces drive the price of electricity and reduce the net cost through increased competition. Competition in the electric power industry will promote utilities to become more efficient and reduce costs in order to lower the electricity prices. Under this deregulated environment, determination of market clearing price (MCP) is one of the important function of a pool operator. In this context, location based price structure became an efficient method for electricity pricing. The Locational Marginal Price (LMP) changes with different parameters such as operational, line design and generator design parameters. The impacts of Locational Marginal Price with respect to different combination of constraints, and comparison of LMP with and without Distributed Generation are discussed in this paper. Distributed generation is modelled at the load buses by injecting necessary MW and the impact is analyzed after running the optimal power flow. The study about the combinational effects of constraints will give more insight to the pricing structure and helps to improve the system's efficient operation. IEEE standard 9 bus system is taken as the test system and LMP is simulated on the Power World Simulator software.