The Impact of Distribution Locational Marginal Prices on Distributed Energy Resources: An Aggregated Approach

With the growth in Distributed Energy Resources (DERs) and the trend towards electrification of heat and transport, distribution networks will be increasingly challenged and will need to be more actively managed. Distribution Locational Marginal Prices (DLMPs) offer a method of clearing markets at distribution level and providing information on transmission losses and congestion in a network due to transmission constraints. This paper examines the application of DLMPs to a region of the South West of England. The resulting DER penetration from applying DLMPs to different voltage levels was considered. It was found that by applying DLMPs down to 11 kV, distributed generation capacity and output could be increased significantly. Applying DLMPs down to 11 kV had a less pronounced effect on flexible demand dispatch due to the coincidence of renewable curtailment and the lowest daily system prices.