COMPARISON OF LOCATIONAL MARGINAL PRICING WITH TWO PART TARIFF STRUCTURE FOR AN INDIAN UTILITY by Harleen Kaur
Abstract
To extract the benefits of the smart grid concepts like demand response and demand side management, it is essential to implement an efficient and reliable dynamic tariff structure in the electrical power system. The two part tariff structure is the sum of fixed cost and variable cost. In almost all the regions of India two part tariff structure is implemented due to its advantages like it encourages the customers not to over announce their demands, provides a balanced approach for the recovery of cost due to the fixed cost paid. On the other hand locational marginal pricing comprises of energy, losses and the transmission line overloading cost. In US locational marginal pricing method is used because of its merits like in this method price depends upon location, as the location distance increases the price increases and vice versa. This research work proposes an approach for comparison of Locational Marginal Pricing with Two Part Tariff pricing structure under Indian utility system. The proposed problem has been solved by running AC Optimal Power Flow (ACOPF) in MATPOWER. From this LMP values are obtained and hence with the help of fixed and variable costs the results are obtained. The proposed comparison is carried out on Indian utility 62-bus system in the form of three cases that is without line loading, with line loading and with line loading considering energy conservation. In case of without line loading as these is no congestion both the methods that is locational marginal pricing and two part tariff shows almost same results. In case of with line loading there comes difference in results of both methods due to the presence of congestion. While in case of line loading considering energy conservation the payment in locational marginal pricing method comes out to be less in comparison to two part tariff pricing structure. The proposed research work shows present two part tariff method should be improved to include the effect of locational marginal pricing method.
