Components of Nodal Prices for Electric Power Systems

A method is presented to provide a detailed description of each nodal price for electric power systems by breaking down each nodal price into a variety of parts corresponding to the concerned factors, such as generations, transmission congestion, voltage limitations, and other constraints or elements. This complete information for nodal prices can be used not only to improve the efficient usage of power grid and congestion management, but also to design a reasonable pricing structure of power systems, or to provide economic signals for generation or transmission investment. Several numerical examples demonstrate this approach.