Documente Academic
Documente Profesional
Documente Cultură
12/6/2005 to 12/8/2005
MRTU
Course Objectives
12/6/2005 to 12/8/2005
MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Settlements
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Settlements Overview
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
MRTU
Start-up Cost
Minimum Load Cost
Incremental energy cost
Capacity Bid for A/S
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MRTU
LMP Overview
12/6/2005 to 12/8/2005
MRTU
LMP Overview
12/6/2005 to 12/8/2005
MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Settlements Overview
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
MRTU
LMP Definition
Marginal cost
Least cost
Supply bids and demand offers
Physical aspects of the transmission system
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MRTU
LMP Definition
Economic theory
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MRTU
LMP Definition
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MRTU
P(Q*)
Supply Curve
Q*
Q (MW)
Supply Curve
- Represents the marginal (Variable) cost of
supply. P(Q*) represent the minimum price-perunit the supplier is willing to be paid to produce
the next increment of Q at the point of Q*.
- The area under the curve up to Q* represent the
total cost ($/h) to produce the quantity Q* (not
considering a constant cost factor)
- Monotonically increasing: P(Q1) P(Q2), Q2 >
Q1
P(Q) ($/MWh)
Demand Curve
P(Q*)
Q*
Q (MW)
Demand Curve
- Represents the marginal (Variable) benefit of
demand. P(Q*) represent the maximum pricebenefit-per-unit the consumer is willing to pay to
consume the next increment of Q at the point of Q*.
- The area under the curve up to Q* represent the
total benefit($/h) to consume the quantity Q* (not
considering a constant cost factor)
- Monotonically decreasing: P(Q1) P(Q2), Q2 > Q1
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MRTU
Supplier Surplus
P(Q*)
Supply Curve
Total Cost to
Supply Q*
Q*
Q (MW)
P(Q) ($/MWh)
Consumer Surplus
Demand Curve
P(Q*)
Q*
Q (MW)
Supplier Surplus
-If the total quantity of Q* is priced at P(Q*), the
solid area shown is Supplier Surplus and represents
the extra revenue above what is required to
produce the quantity Q*.
-Total revenue for Q*is at least P(Q*) Q*. Price
may be > P(Q*). Assume total revenue is P(Q*)
Q*. Total revenue minus total cost to supply (lower
triangle) = area of upper triangle (i.e., Supplier
Surplus)
Consumer or Demand Surplus
- If the total quantity of Q* is priced at P(Q*), the
solid area shown is Consumer Surplus and
represents the extra benefit the consumer saves to
consume the quantity Q*.
-Total payment for Q*is at P(Q*) Q* or less. Price
may be < P(Q*). Assume total payment for Q* is
P(Q*) Q* (bottom square). Total benefit (upper
triangle + lower square) minus total payment
(lower square) = area of upper triangle (i.e.,
Consumer Surplus)
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MRTU
Consumer Surplus
Supply Curve
P(Q*)
Demand Curve
Supplier Surplus
Q*
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
Q (MW)
15 MRTU
12/6/2005 to 12/8/2005
16
MRTU
Objective function
Constraints
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MRTU
Min (area under the supply bid plus (the negative of the area
under the demand offer )
The negative of the area under the demand offer can be modeled
assuming the demand MWhs are negative MWhs
The reference direction is an injection into the system and is
positive, thus demand or withdrawal from the system is negative
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
LMP Definition
A sample supply bid as shown
below. The supply cost is the area
under the curve up to the Dispatch
MW. Area under the curve
represents ($/MWh) (+MW) =
$/h.
$/MWh
$/MWh
Generation or Import Bid
Price2
Price1
Price1
Price2
+MW
0
MW1
MW2
Dispatch MW
Area = Price1 MW1 +
Price2 (Dispatch MW MW1)
Market Ops - R. Treinen
-MW
MW2
MW1
Dispatch MW
Area = Price1 MW1 +
Price2 (Dispatch MW MW1)
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MRTU
LMP Definition
Objective Function
Subject to:
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MRTU
LMP Definition
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MRTU
LMP Definition
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MRTU
LMP Definition
Assume no losses
Assume the line is not enforced so that there will
not be congestion
$/MWh
$/MWh
10
50
200
+MW
-MW
100
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MRTU
LMP Definition
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MRTU
LMP Definition
$50/MWh (- Demand MW )
Note the negative sign on the Demand MW )
Optimization formulation
$10/MWh Supply MW
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MRTU
LMP Definition
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MRTU
LMP Definition
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MRTU
LMP Definition
Option 2:
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MRTU
LMP Definition
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MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Settlements Overview
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
LMP Characteristics
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MRTU
LMP Characteristics
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MRTU
LMP Characteristics
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MRTU
LMP Characteristics
Nodal Price Components
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MRTU
LMP Characteristics
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MRTU
LMP Characteristics
The LMP (nodal price) at Bus i can be calculated using
the following equation
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MRTU
LMP Characteristics
Nodal Price Components
i = Ref - Li Ref - j (j SFji)
Marginal Cost at
the reference bus
Marginal Cost of
losses from the
reference bus to
bus i
Marginal Cost of
transmission
congestion from the
reference bus to bus i
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MRTU
LMP Characteristics
That is, the nodal price at the reference bus is the least
marginal cost of supplying the next increment of load at
the reference bus taking into account the physical
aspects (i,.e., constraints) of the transmission network
(i.e., potential congestion)
No implicit loss component, the loss components are
calculated with respect to the reference bus
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MRTU
LMP Characteristics
Pi = Loss + 1 MW
(Ploss/Pi) = (Loss/Pi)
Li may be positive if there is an increase in loss or
negative if there is a decrease in losses (for counter flow
that decreased flow on transmission lines)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
LMP Characteristics
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MRTU
LMP Characteristics
Sample Prices for LMP components
i =
Ref
- Li Ref
- j (j SFji)
i =
Ref
+ Lossi
+ Congestioni
$40/MWh = $50/MWh
- $1/MWh
- $9/MWh
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MRTU
LMP Characteristics
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MRTU
Observations
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MRTU
ES
T
(A
)
M
W
PJ
H
O
PX
N
)
O
TH
(D
(J
)
N
LW
IL
M
N
YC
)
D
(H
(E
)
VL
G
IL
M
H
K
)
LO
VL
D
U
Congestion
(K
)
Losses
(G
Q
H
N
U
D
(I)
G
EN
ES
E
(B
)
W
O
D
(C
L
C
EN
TR
C
AP
IT
(F
)
90
80
70
60
50
40
30
20
10
0
-10
LBMP ($/MWHr)
Energy
Congestion
Losses
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
44
MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Settlements Overview
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
LMP Settlements
Settlements
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MRTU
LMP Settlements
Settlements
B A = CongestionB - CongestionA
Transmission service for bilateral transactions will
therefore be priced on the same basis as, and
consistent with, energy market transactions
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MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Settlements Overview
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
LMP Observations
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MRTU
LMP Observations
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MRTU
LMP Observations
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MRTU
LMP Observations
The LMP at a bus may be larger
than the largest bid over all the
resources in the system
The LMP at a bus may be
negative
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MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Observations
BREAK
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
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MRTU
LMP Examples
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MRTU
LMP Examples
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MRTU
$10
300MWs @ $10
I need MWs.
Sale goes to the
lowest bidder with capacity.
Going once....
Capacity
499 MW
300 MWs
MW
$15
Capacity
200 MWs
MW
$20
Load
199MWs @ $15
Market Operator
Not Dispatched
Capacity
200 MWs
Market Ops - R. Treinen
$15
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MRTU
$10
Capacity
I need MWs.
Sale goes to the
lowest bidder with capacity.
Going once....
300 MWs
Load
599 MW
MW
$15
Capacity
200 MWs
MW
$20
Capacity
200 MWs
12/6/2005 to 12/8/2005
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MRTU
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58
MRTU
G1
Capacity = 400 MW
Capacity = 300 MW
Energy bid is
$10/MWh
A
500 MW
Capacity
Capacity = 200 MW
Energy bid is
$20/MWh
G2
0 MW @ $20 Bid
12/6/2005 to 12/8/2005
500 MW
Capacity
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MRTU
1/3 MW
2/3 MW
1/3 MW
B
1 MW
A
C
2/3 MW
1/3 MW
1 MW
1 MW
60
MRTU
1 MW
2/3 MW
B
1 MW
1/3 MW
A
C
1/3 MW
12/6/2005 to 12/8/2005
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MRTU
0 MW Load
B
Capacity = 300 MW
Bid is $10/MWh
Final Dispatch = 200 MW
G1
A
LMP = $10
133 MW
Bid is $20/MWh
Final Dispatch = 0 MW
G2
Capacity = 200 MW
C
67 MW
Capacity = 400 MW
67 MW
200 MW Load
LMP = $10
12/6/2005 to 12/8/2005
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MRTU
12/6/2005 to 12/8/2005
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LMP = $10
150 MW
Capacity
200 MW
50 MW
Capacity = 400 MW
Capacity = 300 MW
100 MW
Bid is $20/MWh
Final Dispatch = 0 MW
G2
C
200 MW Load
LMP = $10
12/6/2005 to 12/8/2005
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MRTU
Split up the
Generation to match
each of the loads
(2/3) 50
(1/3) 200
50 MW
(1/3) 200
A
200 MW
(1/3) 50
(2/3) 200
C
(1/3) 50
200 MW
12/6/2005 to 12/8/2005
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MRTU
12/6/2005 to 12/8/2005
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MRTU
$2,500.00
Collections
Payments
$2,500.00
$2,500.00
Net
GENERATION CREDITS
Generation Total
Location LMP
(MWh) Credit
Bus A
$10.00
250
$2,500.00
$0.00
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MRTU
B
LMP = $10
Capacity = 300 MW
Bid is $10/MWh
Final Dispatch = 400 MW
242 MW
Constraint Violated !!!
Capacity
200 MW
83 MW
Capacity = 400 MW
158 MW
Bid is $20/MWh
Final Dispatch = 0 MW
G2
325 MW Load
Flow AB = (1/3 325 MW) + (2/3 75) = 158 MW
LMP = $10
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MRTU
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MRTU
LOAD PAYMENTS
Location
Bus B
Bus C
GENERATION CREDITS
LMP
Load (MWh) Total Charge
$10.00
75
$750.00
$10.00
325
$3,250.00
Total
$4,000.00
Collections
Payments
$4,000.00
$4,000.00
Net
Location LMP
Generation (MWh) Total Credit
Bus A
$10.00
400
$4,000.00
$0.00
12/6/2005 to 12/8/2005
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MRTU
Agenda
LMP Overview
LMP Definitions
LMP Characteristics
LMP Observations
BREAK
LMP Settlements
LMP Examples (unconstrained cases)
LMP Examples (constrained cases)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
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MRTU
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MRTU
325 G2 output
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MRTU
Split up the
Generation to match
each of the loads
(2/3) 75
325 G2 MW
75 MW
(1/3) 75
C
(1/3) 75
(325 G2) MW
12/6/2005 to 12/8/2005
75
MRTU
G2 = 62.5 MW
G1 = (325 G2) + 75 MW
G1 = (325 62.5) + 75 MW
G1 = 337.5 MW
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
138 MW
Capacity = 300 MW
Bid is $10/MWh
Final Dispatch = 337.5 MW
200 MW
Capacity
200 MW
63 MW
Capacity = 400 MW
LMP = $10
G1
75 MW Load
LMP = $??
Bid is $20/MWh
Final Dispatch = 62.5 MW
G2
325 MW Load
LMP = $20
12/6/2005 to 12/8/2005
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MRTU
Bus B ?
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
LMP at bus B
Add 1 MW of load at bus B
Options to serve this 1 MW of load
Creates no violations
Serves this additional 1 MW at least cost since G1 is cheaper
than G2 a combination of G1 and G2 is cheaper than just using
G2
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
79 MRTU
12/6/2005 to 12/8/2005
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MRTU
(2/3) G1
G1
G2 = 1 - G1
(1/3) (1 - G1)
(1/3) G1
G2 + G1 = 1 MW
(2/3) (1 - G1)
(1/3) G1
C
(1/3) (1 - G1)
G2 = 1- G1
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MRTU
Since G1 + G2 = 1 MW
G2 = (1/2) MW
Market Ops - R. Treinen
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MRTU
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MRTU
G1 = (0.4) MW
G2 = (0.6) MW
-0.0667 MW
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MRTU
G1 = (0.4) MW
G2 = (0.6) MW
G1 = (0.6) MW
G2 = (0.4) MW
+0.0667 MW
This increases the flow on the line and violates the line limit
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
G1 = (0.4) MW
G2 = (0.6) MW
Feasible with change in system cost of $16/h
LMP = $16/MWh
G1 = (0.6) MW
G2 = (0.4) MW
Infeasible
G1 = (0.5) MW
G2 = (0.5) MW
Feasible with change in system cost of $15/h
LMP = $15/MWh
Best (optimal and feasible) solution, ($15/h) < ($16/h)
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
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MRTU
B
Capacity = 300 MW
Bid is $10/MWh
Final Dispatch = 337.5 MW
A
LMP = $10
200 MW
Constraint Honored !!!
Capacity
200 MW
63 MW
Capacity = 400 MW
138 MW
G1
75 MW Load
LMP = $15
G2
Bid is $20/MWh
Final Dispatch = 62.5 MW
C
325 MW Load
LMP = $20
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MRTU
GENERATION CREDITS
Generation Total
Location LMP
(MWh)
Credit
Bus A
$10.00
338 $3,380.00
Bus C
$20.00
62 $1,240.00
Total
$7,625.00
$4,620.00
Collections
Payments
$7,625.00
$4,620.00
Location
Bus B
Bus C
Net
Over Collection
-$3,005.00
12/6/2005 to 12/8/2005
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MRTU
12/6/2005 to 12/8/2005
SFji)
90
MRTU
12/6/2005 to 12/8/2005
91
MRTU
The shadow price is the change in total system cost to the change in
constraint value
The OTC increase to 201 MW results in an increase in this lower priced unit,
whose original value was 337.5 MW (a change of 1.5 MW)
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MRTU
B = A - j (j SFji)
B = A #5 SF#5,B
Market Ops - R. Treinen
12/6/2005 to 12/8/2005
93
MRTU
SF#5,B = (-1/3)
B = A #5 SF#5,B
$15/MWh
This answer is the same as the one determined through the
Laymans process
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MRTU
Any Questions?
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