Decomposing Locational Marginal Prices in Look-Ahead Economic Dispatch

In the real-time electricity market, look-ahead security constrained economic dispatch (SCED) plays a substantial role in ensuring the sound operation of the electricity spot market with the high penetration of renewable energy. It is crucial to appreciate the effect of unit operation constraints on locational marginal prices (LMPs) in real-time electricity market. To this end, this paper establishes the look-ahead SCED model, derives the LMP formulae under the look-ahead SCED optimization model, and anatomizes the impact of unit operation constraints on the LMP and its components. These formulae and analysis can help market participants to evaluate their own benefits based on their own unit physical parameters. Finally, the correctness of the analysis in this paper is verified via a 3-bus system.