DISTRIBUTED SPOT PRICING IN RADIAL-DISTRIBUTION SYSTEMS

Spot pricing is a method for pricing electricity that maximizes the ec onomic efficiency of the power system. We derive an expression for the spot prices in a radial distribution system, in terms of system quant ities such as power line flows. The system's radial structure leads to simplified spot price expressions. We do not assume that all the prob lem data is available at one location (ie. to the utility). The propos ed pricing algorithm addresses the issue of decentralized knowledge by using a distributed processing scheme, which emphasizes local computa tions. We also show how line flow constraints can be implemented as an integral part of the proposed spot pricing algorithm.