Iteration-Based Linearized Distribution-Level Locational Marginal Price for Three-Phase Unbalanced Distribution Systems

Distributed energy resources (DERs) are rocking the utilities’ business landscape. It calls for competitive market environments that incentivize DERs to form maximum operating efficiency. Among proposed pricing schemes, distribution-level locational marginal price (DLMP) is effective in signaling the marginal generation cost differences driven by energy losses and network constraints. It can be derived from a distribution-level optimal power flow (OPF) framework, as it essentially presents the sensitivity of optimized generation cost towards incremental loads. However, due to the high resistance-to-inductance ratio and unbalanced characteristics of distribution networks, computational affordable DLMPs are highly challenged. This article provides a linear-approximated DLMP that can be solved efficiently and generalized to account for reactive power flow, three-phase unbalanced loads and meshed network structure. The successive linear programming technique is introduced to enhance the model accuracy. Case studies on an IEEE 123-Bus system validate its accuracy against a nonlinear benchmark and capability in offering proper incentives.