Three-Phase Distribution Locational Marginal Pricing for Competitive Electricity Markets with Distributed Generators and Flexible Loads

A rapid increase in the penetration of distributed energy resources (DERs) in electricity markets has motivated the development of distribution locational marginal pricing (DLMP) for enhanced operational reliability and efficiency. This paper presents a market clearing model that computes DLMP from a timeseries three-phase unbalanced AC optimal power flow (ACOPF) model. The DLMP is decomposed into marginal energy, congestion, and residual price components which correspond to the dual variables of the ACOPF problem. Case studies are demonstrated using a 1224-node network model containing distributed generators, battery energy storage systems and demand response loads. The results show that ACOPF-based DLMP enables distribution system operators to ensure grid security and reliability while improving market competitiveness and reducing cost through the deployment of DERs.