Sensitivity-Based Pricing and Optimal Storage Utilization in Distribution Systems

In the deregulated power system, locational marginal prices (LMPs) are used in transmission engineering predominantly as near real-time pricing signals. This work extends this concept to distribution engineering by formulating a distribution LMP signal based on power flow sensitivities in a distribution system. A Jacobian-based sensitivity analysis has been developed for application in the distribution pricing method. Increasing deployment of distributed energy sources and storage devices is being seen at the distribution level and this trend is expected to continue. The optimal operation of the distributed infrastructure has been formulated as a multiobjective optimization problem and a solution algorithm has been developed that is based on the normal boundary intersection method. A parallel processing environment has been used to replicate the distributed nature of controls at many points in the distribution system. The Roy Billinton Test System has been used to demonstrate the applications.