Nodal Pricing Without Marketing Surplus Based On Dissipation Power Imputation

With the implement of the power industry deregulation, the energy pricing mechanism is changing imperatively. Energy pricing is the basis of interest distribution and the fair competition in power market. It also plays important role in system resources allocation. Reasonable pricing mechanism has great significance for establishment of fully competitive and orderly power market.Due to its rich economic information, the location marginal price is widely applied in today's power market. Firstly, the paper gave detail analysis on the economic significance of location marginal price, and introduces its advantages in the market environment. However, it remains some shortcomings of location marginal price in practice:the cost of marginal losses is not clear and this pricing mechanism will also bring marketing surplus. At present, there is controversy on management of the marketing surplus. On the basis of economic theory, the paper attempts to find out the essential cause of this issue. Based on the dissipation power imputation and combining with actual load flow, a method to draft nodal price without marketing surplus is proposed.According to classic circuit theory and dissipation power imputation theory, the new pricing method firstly calculated the cost owing to system losses and system congestion, then assigned them to each source or load. The relationship between generation and power consumption is also clear. The calculation formulas of proposed nodal price are then derived and proved mathematically. This new pricing method can not only eliminate marketing surplus, but also make the loss component of the nodal price explicit and easy to calculate. Simulation results of IEEE 9-bus system and IEEE 14-bus system verified effectiveness and validity of this new method.