Locational Marginal Pricing for real and reactive power

The Locational Marginal Prices (LMPs) for real and reactive power is calculated with the framework of full AC Optimal Power Flow (OPF). The production cost of reactive power from various generation sources including generators and reactive compensators was integrated in the objective function with operation constraints. Interior Point method combined branch and bound was employed to solve the OPF problem with discrete variables. The decomposition of LMP into three components of energy reference, network loss and congestion are computed. The calculation of LMP for real and reactive power at each bus was tested using an IEEE 30-bus system model.