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An Effective Approach for Locational Marginal Price Calculation at Distribution Level

This paper develops an effective approach for the locational marginal price calculation for local generations in an active distribution network containing different types of distributed generators (DGs). The proposed approach is based on encouraging private units to reduce power loss and greenhouse gas (GHG) emissions. To this end, firstly, the distribution system operator (DSO) surplus profit, obtained by the reduction of power loss and GHG gas emission due to the operation of private units in the network, is considered as a financial source for encouraging private units. Then, according to the contribution of each private DG, the locational marginal price is calculated. The proposed approach is an effective and incentive-based approach for DSO to retain control over private units to reduce power loss and GHG emissions. The simulation results on a modified 118-bus standard distribution test system demonstrate the efficiency of the proposed approach compared to the previous approaches.