Yang, Jiajia, Dong, Zhao Yang, and Wen, Fushuan (2021) A comparative study of marginal loss pricing algorithms in electricity markets. IET Generation, Transmission & Distribution, 15 (3). pp. 576-588.

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Abstract

Due to the development of new technologies, change of generation mix and appearance of newly formed energy supply hubs, there is a large year-on-year change in the marginal loss factors in power systems. Since any change of marginal loss factors could have significant impacts on payment of loads and profitability of generators, it is necessary to carry out a comparative study on the loss factor-based locational marginal pricing methods. Considering that a systematic comparison of various locational marginal pricing methods has not been reported in existing publications, this work presents a comparative study of the loss factor-based locational marginal pricing methods that are widely adopted in electricity markets. Advantages and disadvantages of each locational marginal pricing method are explored in detail, and could serve as references in selecting appropriate locational marginal pricing methods in practice. The selected five locational marginal pricing models are tested in two standard power systems, that is, the IEEE 5-bus and 39-bus systems. Then, through numerical experiments and detailed analysis, key findings about the reference point dependency of loss factors, accuracy of loss estimation, load payment, generation income, and market settlement surplus are summarised and elaborated. It is found that marginal loss factors-based locational marginal pricing methods tend to produce a higher market settlement surplus and can lead to a lower generation income than other locational marginal pricing methods.

Item ID:	78124
Item Type:	Article (Research - C1)
ISSN:	1751-8695
Copyright Information:	This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited. © 2020 The Authors. IET Generation, Transmission & Distribution published by John Wiley & Sons Ltd on behalf of The Institution of Engineering and Technology.
Date Deposited:	18 Apr 2023 02:45
FoR Codes:	40 ENGINEERING > 4008 Electrical engineering > 400804 Electrical energy storage @ 10% 40 ENGINEERING > 4008 Electrical engineering > 400805 Electrical energy transmission, networks and systems @ 80% 38 ECONOMICS > 3899 Other economics > 389901 Comparative economic systems @ 10%
SEO Codes:	17 ENERGY > 1703 Energy storage, distribution and supply > 170305 Energy systems and analysis @ 30% 17 ENERGY > 1703 Energy storage, distribution and supply > 170306 Energy transmission and distribution (excl. hydrogen) @ 30% 17 ENERGY > 1703 Energy storage, distribution and supply > 170309 Smart grids @ 40%
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