Improving Accuracy in Nodal Marginal Costs and Active Energy Valuation Using PMUs in Peruvian Electricity Market Framework

In real-time nodal marginal cost-based electricity markets, inaccuracies in conventional measurement systems introduce variability in the determination of these costs and the valuation of active energy, undermining price reliability. This study proposes integrating Phasor Measurement Units (PMUs) into the State Estimation (SE) process to enhance the precision obtained for subsequent application in Optimal Power Flow (OPF) calculations for Real-Time Nodal Marginal Costs (CMgCP). A comprehensive model was developed to replicate the measurement, estimation, and optimization processes for CMgCP calculations, following the operational framework used in the Peruvian electricity market. Furthermore, an analysis was conducted comparing scenarios with and without PMU measurements at the generation level.The results demonstrate that incorporating PMUs improves the accuracy of real-time nodal marginal cost calculations. Specifically, the variability at critical generation nodes was reduced by nearly two-thirds, and the deviation of energy valuations across load points improved by close to half. These enhancements underscore the increased precision and reliability of the spot electricity market achieved through PMU integration. In conclusion, employing PMUs in SE reduces the dispersion of marginal costs and increases reliability of energy valuation, making the market less susceptible to measurement errors compared to conventional SCADA-based methods.