2017/02/22 by Parhizi, Sina, Majzoobi, Alireza, Khodaei, Amin
#FOS: Electrical engineering #Systems and Control (eess.SY) #electronic engineering #information engineering
paper · doi:10.48550/arxiv.1702.07030
Introduction of market mechanisms in distribution systems is currently subject to extensive studies. One of the challenges facing Distribution Market Operators (DMOs) is to implement a fair and economically efficient pricing mechanism that can incentivize consumers to positively contribute to grid operations and to improve economic performance of the distribution system. This paper studies a penalty-based pricing mechanism in distribution markets and further investigates the interrelationship between the locational marginal prices (LMPs) at transmission and distribution levels. As a result, a closed-form relationship between these LMPs is derived. The possibility of zeroing out the settlement profit is further investigated under the proposed pricing mechanism.