Impact of Load Forecast Uncertainty on LMP

Abstract

In day-ahead power markets, the calculation of locational marginal price (LMP) relies on the load forecasting results. It is well known that short-term load forecasting results always contain certain degree of errors mainly due to the random nature of the load. At the same time, LMP step change exists at critical load level (CLL). Therefore, it is interesting to investigate the impact of load forecast uncertainty on LMP. With the assumption of distribution of actual load, this paper formulates the probability mass function of the random variable LMPt, LMP at time t, and then proposes the concept of probability-based expected LMP. Two useful curves, deterministic LMP versus forecasted load and expected LMP versus forecasted load, are presented. The first curve is designed to help identify the trustworthy regions of traditional LMP-Load curve. The second curve is demonstrated to be smooth and therefore eliminates the step changes in deterministic LMP simulation. The proposed concept and method are illustrated on a modified PJM 5-bus system.

Meeting Name

2009 IEEE/PES Power Systems Conference and Exposition, PSCE 2009 (2009: Mar. 15-18, Seattle, WA)

Department(s)

Electrical and Computer Engineering

Keywords and Phrases

Critical Load Level; Energy Markets; Locational Marginal Pricing (LMP); Optimal Power Flow (OPF); Power Markets; Uncertainty; Acoustic Generators; Commerce; Electric Load Flow; Electric Power Transmission Networks; Normal Distribution; Power Electronics; Power Transmission; Random Errors; Random Processes; Random Variables; Electric Load Forecasting

International Standard Book Number (ISBN)

978-1424438112

Document Type

Article - Conference proceedings

Document Version

Citation

File Type

text

Language(s)

English

Rights

© 2009 Institute of Electrical and Electronics Engineers (IEEE), All rights reserved.

Publication Date

01 Mar 2009

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