Analyzing PV System Effects on LMP Prices and Transmission Losses

July 28, 2015
Session T1A: Electricity Economics — Room 104
8:30 am  -  9:30 am

Energy demand has increased along with concerns about environmental issues, energy security, and foreign fuel dependence. As such, local renewable energy production has received much attention, and Photovoltaic (PV) systems can be a viable approach to fulfill local energy demands. It is assumed that PV applications will mainly involve urban areas, as >80% of people in developed countries live in urban environments. Energy density of consumption in these areas is high, especially during the day. PV systems in urban areas have the potential to reduce the energy demand on the grid infrastructure, shift Locational Marginal Price (LMP), and minimize transmission-distribution losses. The optimal power flow has been solved to show possible effects of PV systems on the electricity market using the IEEE 30-bus system. PV systems have been placed in areas where the demand is categorized as high/low, while LMP prices and transmission losses were analyzed.The results show that the LMP decreases significantly (around 30%) in the buses that have high demand when the PV systems are added to this bus, and decrease around 3% in other buses. On the other hand, when PV systems are added to low demand buses, the LMP decreases in this bus, but LMP increases in the other bus. Also, transmission losses decrease when PV is added to system especially when they added to high demand buses. These results show that choosing the buses to add PV system is crucial for electricity market.