Locational marginal pricing in ERCOT market

Abstract

Locational marginal pricing (LMP) system is complex but critical to ensure a power market's smooth and health operation. This paper addresses both the current and the future LMP system in the ERCOT market. It starts with introducing the operating process of the current zonal LMP, then examines several major challenges and issues associated with the current LMP operations, and in the end gives an introduction to the proposed nodal LMP system which is anticipated to be put in place by January 1st 2009