Investigation of nodal prices in a deregulated competitive market-case studies

Abstract

Deregulation is causing a great impact on the electric power industry around the world. Many transactions in electric power markets are based on bidding competition after deregulation. The nodal price plays an important role in such a kind of market to reflect the bidding strategy for a market participant. This paper investigates the impact of ancillary service, security constraint, and MW loss on nodal prices in the system. The causes for the variation of nodal prices are explained. The problem is formulated with DC models and solved by simplex linear programming. The simulation results help understand the meaning of the nodal prices and help develop bidding strategies for the market participants.