Regional Marginal Price Mechanism in the China Northwest Power Grid

As a regional power grid with the highest penetration of renewable energy, the China Northwest Power Grid is now facing with the renewable power curtailment. That is caused by the inefficient energy utilization, interest conflicts with thermal power generators and the immature electricity price mechanism. To address those problems, this paper proposes a regional marginal price (RMP) mechanism in the China Northwest Power Grid. Firstly, the locational marginal price (LMP) in the Northwest China is calculated based on the economic dispatch theory. Secondly, on the premise of considering geographical location and renewable resource distribution, the Northwest China is divided into seven regions based on the clusters of LMP values. Then, the RMPs in two typical days are calculated by PLEXOS, which verifies the effectiveness of RMP mechanism. Finally, the benefit of RMP mechanism in the China Northwest Power Grid is shown by the comparison of three electricity price mechanisms.