Effects of price caps on nodal prices of electricity

Author

Liu, Wei ; Alvarado, Fernando L.

Author_Institution

GE Energy, Schenectady, NY

fYear

0

fDate

0-0 0

Abstract

This paper developed an OPF model including price caps based on the duality theory of linear programming. Implementing price caps on the nodal prices is equivalent to implementing an upper bound on a function of the Lagrange multipliers of the primal problem, which are the variables in the dual problem. By solving the dual of the modified dual problem, we can find how the price caps affect the power system. This model clearly reveals how price caps affect nodal prices, generation dispatch, and load. It illustrated not only the price distortions that occur as a result of price caps, but the inability to solve the problem in several cases with price caps unless "extra generation" (however obtained) or "load shedding" is assumed

Keywords

linear programming; load flow; load shedding; power generation dispatch; power generation economics; pricing; Lagrange multipliers; duality theory; electricity nodal prices; generation dispatch; linear programming; load shedding; optimal power flow model; price caps; Costs; Distributed control; Electricity supply industry; Lagrangian functions; Linear programming; Microeconomics; Power system modeling; Production; Supply and demand; Upper bound; Distributed Generation (DG; Lagrange Multipliers; Linear Programming; OPF; Price caps; dual problem; duality theory; nodal price; primal problem;

fLanguage

English

Publisher

ieee

Conference_Titel

Power Engineering Society General Meeting, 2006. IEEE

Conference_Location

Montreal, Que.

Print_ISBN

1-4244-0493-2

Type

conf

DOI

10.1109/PES.2006.1709059

Filename

1709059