Locational Marginal Pricing Basics for Restructured Wholesale Power Markets

Haifeng Liu, Leigh Tesfatsion () and A.A. Chowdhury

Staff General Research Papers from Iowa State University, Department of Economics

Abstract: In this tutorial paper, different AC and DC optimal power flow (OPF) models are presented to help understand the derivation of Locational Marginal Prices (LMPs) in restructured wholesale power markets. As a byproduct of this analysis, the paper provides a rigorous explanation of the basic LMP and LMP-decomposition formulas (neglecting real power losses) presented without derivation in the business practice manuals of the U.S. Midwest Independent System Operator (MISO). Related resources can be accessed at: http://www.econ.iastate.edu/tesfatsi/aelect.htm

Keywords: Locational marginal pricing; wholesale power market; AC optimal power flow; DC optimal power flow; MISO (search for similar items in EconPapers)
JEL-codes: C0 D4 L0 L3 Q4 (search for similar items in EconPapers)
Date: 2009-06-03

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:isu:genres:13072

Access Statistics for this paper

More papers in Staff General Research Papers from Iowa State University, Department of Economics
Address: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070
Contact information at EDIRC.
Series data maintained by Stephanie Bridges ().