DCOPF-based LMP calculation considering line reactive flows

Fast and accurate algorithms to compute locational prices are vital for real time electricity markets. Most common method for evaluating LMPs in electricity markets is DCOPF-based approach. Major limitation of DCOPF is the error produced by neglecting the effect of reactive power flows in line loading. This paper describes a method to incorporate this effect. The method can be easily integrated into existing LMP calculation software because the computation remains based on DCOPF. The proposed method is applied to the PJM 5-bus system and to the IEEE 24-bus Reliability Test System. Simulation results show the accuracy as well as the efficiency of the proposed solution technique.