Locational Marginal Prices Scheme Considering Transmission Congestion and Network Losses

This manuscript presents a basic concept of nodal price modeling in a competitive electricity market and some special considerations on its formulation. Nodal prices represented by locational marginal prices (LMP) based settlement strategy is carried out in a deregulated market environment to establish the amount of money received by generation companies from system operator and paid to system operator from customers. In this approach, cost of transmission services is implemented together with LMP which represents energy price, network losses cost, and transmission congestion cost. The results show that the proposed method has a better performance than the use of conventional approach.

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