Impact of distributed energy resources on locational marginal prices and electricity networks

Abstract

Distributed energy resources (DERs) are projected to be significant components of the modern power grid, active players in electricity markets and salient tools used in the operation of electric grids. The objective of this thesis is to determine the impact distributed energy resources have on power grids and markets. This research investigates, models, and quantifies the influence of DERs on prices of electricity, networks and environmental effects. There is an evolving role between distribution and transmission system operations. Quantitative modeling and a qualitative literature, industry and regulatory review were utilized to determine the impact that DERs have on market prices, grid operations and the environment of the future. Distributed energy resources will impact the electric grid: from market economics to grid operations and reliability to coordination, and regulations. Firstly, from the European Union to the United States, power systems across the world are transforming to include and integrate larger penetrations of decentralized resources, while maintaining or increasing efficiency and operational reliability. Secondly, distributed energy resources have a quantifiable impact on short-term wholesale pricing of electricity (LMPs). Thirdly, distribution locational marginal prices (DLMPs) have been approximated, using a direct current optimal power flow, and yield insight into the revenues, prices, emissions and other bulk power system impacts at the interface between real-world transmission and distribution electricity networks. Lastly, the impact and to whom, whether costly or beneficial, that distributed energy resources have in markets and society, depends on the location in which they are interconnected.