Identification of Price Zones in Network-Constrained Electricity Markets

Ricardo Moreno, David Pozo

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

Abstract

The identification of price zones is a critical issue for designing efficient mechanisms in network-constrained electricity markets. It consists of identifying nodes in zones that share similar Locational Marginal Prices (LMPs) and are physically connected by transmission lines. This paper proposes a methodology based on graph theory to identify price zones and the corresponding transmission tie-lines interconnecting them considering the changing pattern of LMPs. A mathematical characterization of network-constrained electricity market based on LMPs is proposed to construct a market-aware graph. Then, a spectral clustering methodology is applied to identify the price zones. The effectiveness of the proposed approach is illustrated on a 118-node test system.

Original languageEnglish
Title of host publicationProceedings of 2021 IEEE PES Innovative Smart Grid Technologies Europe
Subtitle of host publicationSmart Grids: Toward a Carbon-Free Future, ISGT Europe 2021
PublisherInstitute of Electrical and Electronics Engineers Inc.
ISBN (Electronic)9781665448758
DOIs
Publication statusPublished - 2021
Externally publishedYes
Event11th IEEE PES Innovative Smart Grid Technologies Europe, ISGT Europe 2021 - Espoo, Finland
Duration: 18 Oct 202121 Oct 2021

Publication series

NameProceedings of 2021 IEEE PES Innovative Smart Grid Technologies Europe: Smart Grids: Toward a Carbon-Free Future, ISGT Europe 2021

Conference

Conference11th IEEE PES Innovative Smart Grid Technologies Europe, ISGT Europe 2021
Country/TerritoryFinland
CityEspoo
Period18/10/2121/10/21

Keywords

  • Clustering
  • locational marginal prices
  • zonal pricing

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