Abstract
In the elelctricity market, electricity price plays an important economic leverage role in guiding the optimal allocation of resources, so a reasonable electricity price mechanism is the cornerstone of the success of the power market, and judging the rationality of the electricity price mechanism requires a profound understanding of the formation of electricity price. In this paper, firstly, the economic concept of market clearing price (MCP) is used to uniformly explain several electricity price mechanisms in the market, and then the most common locational marginal price (LMP) is analyzed with the example of two buss. It is pointed out that one bus represents one power market in essence; Then, for more complex systems, the method of modeling and solving is adopted, which mainly adopts a set of modeling ideas of optimal power flow and uses Lagrange multiplier method combined with Karush-Kuhn-Tucker (KKT) optimality condition to solve the model to obtain the components of LMP, and also analyzes the physical meaning of each component in combination with the specific power system; Finally, the correctness of the theory is verified by a PJM 5-bus system.
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