Implementing zonal pricing in distribution network: The concept of pricing equivalence

Zhao Yuan, Mohammad Reza Hesamzadeh

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

7 Citations (Scopus)

Abstract

Distribution locational marginal pricing (DLMP) is critical market mechanism to boost services from distributed energy resources (DER). This paper propose to design zonal pricing in distribution network according to the concept of pricing equivalence (PE). The rules of the zonal pricing are derived. We prove that equivalent load shift from demand response can be achieved by zonal pricing if pricing equivalence is deployed. Convex AC optimal power flow (OPF) is used to calculate zonal prices. The benefits of convex AC OPF are more accurate energy pricing and global optimization target. The responsive load with passive load controllers are modeled and solved in GAMS platform. Different zonal pricing approaches (PE, reference node and average of nodal prices) are compared. IEEE 14-bus network and two IEEE 13-node networks are connected to be an illustrative test case offering numerical results. The results show that zonal pricing designed according to PE can achieve the same load shift effects and quite close consumer payments as nodal pricing. PE outperform other zonal pricing approaches prominently in congested network situations.

Original languageEnglish
Title of host publication2016 IEEE Power and Energy Society General Meeting, PESGM 2016
PublisherIEEE Computer Society
ISBN (Electronic)9781509041688
DOIs
Publication statusPublished - 10 Nov 2016
Event2016 IEEE Power and Energy Society General Meeting, PESGM 2016 - Boston, United States
Duration: 17 Jul 201621 Jul 2016

Publication series

NameIEEE Power and Energy Society General Meeting
Volume2016-November
ISSN (Print)1944-9925
ISSN (Electronic)1944-9933

Conference

Conference2016 IEEE Power and Energy Society General Meeting, PESGM 2016
Country/TerritoryUnited States
CityBoston
Period17/07/1621/07/16

Bibliographical note

Publisher Copyright:
© 2016 IEEE.

Other keywords

  • Convex AC OPF
  • Demand response
  • Distribution network
  • Pricing equivalence
  • Zonal pricing

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