An Analysis of Location Marginal Prices Considering Demand Response Resources

This paper presents a new approach of a evaluation of location marginal prices(LMPs) considering demand response resources in the competitive electricity market. The stabilization of the electric power supply and demand balance has been one of the major important activities in electric power industry. Recently, much attention is paid to the demand-side resources which are responsive to incentives or time-varying prices and existing power system planning and operation activities are incorporated with the so-called demand response resources. In this paper, we first present an analytical method for calculation of LMPs considering demand response resources and then break down the LMPs into three components. In this study, we assume that Korean power system consists of two major regions, one which is the metropolitan and the other is non-metropolitan region. In the case study, we have considered several LMPs cases with different use of locational demand response resource and we can obtain a locational signal to demand response resources. Also, the economics of demand response resources are evaluated, compared with the increase of transmission line capacity and of generation capacity.

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