Decomposition model of optimal spot pricing and interior point method implementation

Optimal pricing for real and reactive power is a very important content in a deregulation environment. This paper summarises the optimal pricing problem as an extended optimal power flow problem. Then, spot prices are decomposed into different components reflecting various ancillary services. The deviation of a decomposition model is given in detail. The primary-dual interior point method is applied to avoid “go” “no go” gauge. In addition, the proposed approach can be extended to cater for other types of ancillary services