APPLICATIONOF THE LOCATIONAL MARGINAL PRICINGMODEL INNORTH CHINAGRID:A PRELIMINARYSTUDY

Forthefirst time, thelocational marginal pricing (LMP) based market modelisstudied onaChinese regional market. This paperreports uponpreliminary results ofapplying LMP market design inNorthChinaGrid(NCG).Commonkeyfeatures of successful markets arediscussed inreference totheexisting LMP markets intheU.S.andother countries. As thepricing and dispatch framework ofanLMP market, security constrained economic dispatch isapplied totheNCG model. Thesimulation scenarios aredesigned tosimulate thelikely Chinese restructuring processof introducing competition gradually. Extensive simulations areperformed. Effects oftheLMP market based dispatch onNCG system arediscussed intermsofgridsecurity, LMPs,average energy costs, andtransmission congestions.