An integrated nodal price for distribution networks to facilitate cost recovery and renewable energy promotion

Abstract

Traditional prices at the distribution level cannot efficiently guide the comprehensive cost recovery. To this end, this paper proposes a novel integrated nodal price by solving a comprehensive investment problem. The proposed integrated nodal price can be inherently decomposed into three price components: i) extended distribution locational marginal price of electricity, ii) distribution locational price of carbon, and iii) distribution locational price of investment. Specifically, the extended distribution locational marginal price enables to recover the power generation cost and on–off cost of generation units via a convexified mixed-integer optimal power flow model; the distribution locational price of carbon enables to recover the carbon emission cost through a carbon footprint tracing method; and the distribution locational price of investment enables to recover the investment cost of distribution network via a reverse power flow tracking method. These three price components work in a complementary manner and are coupled with each other through the shared optimal power flow results. Numerical results demonstrate that the proposed extended distribution locational marginal price can reduce the production cost by 10.41% in contrast to the traditional distribution locational marginal price.