An integrated transmission and distribution systems model with distribution-based LMP (DLMP) pricing

This paper presents an iterative approach to integrate the transmission and distribution systems together. The ideal approach is to solve a single transmission and distribution systems optimal power flow (OPF) model. However, this is computationally intractable with existing technologies due to the size of the system. Therefore, the integrated OPF problem is decomposed into two subsequent problems: the transmission OPF and the distribution OPF. With the proposed algorithm, the distribution system is modeled by a residual demand curve in the transmission system OPF while the transmission system is modeled by a transmission-constrained residual supply curve in the distribution system OPF.