A Review of the Application of Locational Marginal Price Theory in The New Situation

Locational marginal price (LMP) is a method to measure the price of electricity. It reflects the space-time economy of electricity, and in the meantime, it is one of the means to deal with congestion management in the power market. This paper describes LMP from three aspects. Firstly, the basic model and solution method of LMP are sorted out; secondly, the main factors affecting LMP are analyzed; thirdly, the settlement model of LMP is summarized in three electricity markets from the time scale: day-ahead, real-time and afterwards. With the development and application of a high proportion of renewable energy, energy storage system (ESS) and energy Internet, the LMP model and algorithm are facing new challenges. On the basis of sorting out the latest research and application results, the current key problems faced by LMP research field are summarized in this paper.