Evaluating the Impact of Offering Prices on LMP: An Analytical Method
Locational marginal price (LMP) is the basis of power markets; the impact of offering prices of power plants on LMP is cared by merchant participants, market operators, and policy makers. This paper investigates the impact of offering prices, which appear in the objective function of market clearing optimal power flow (OPF), on system LMPs. Based on multi-parametric programming theory, it is proven that LMPs are piecewise affine functions of offering prices these coefficients in the objective function; then, a dedicated algorithm is developed to retrieve the analytical expressions of LMP functions by solving the OPF problem at some sampled coefficients. The proposed approach is validated on the modified PJM 5-bus system and IEEE 118-bus system.
Authors
- Zhongjie Guo (ORCID: https://orcid.org/0000-0001-5043-1560)
- Shuai Chen (ORCID: https://orcid.org/0000-0002-4016-8217)
- Jun Bai (ORCID: https://orcid.org/0000-0001-6784-4302)
- Rui Wang (ORCID: https://orcid.org/0000-0003-3358-2708)
Institutions
- University of Electronic Science and Technology of China (CN)
Publication Details
- Published
- 2025-07-04
- DOI
- https://doi.org/10.1109/icpet66029.2025.11160418
- Primary Topic
- ICT Impact and Policies
- Type
- article
- Field-Weighted Citation Impact
- 0.00