Impacts of high penetration wind generation and demand response on LMPs in day-ahead market

Environmental issues in power systems operation lead to a rapid deployment of renewable wind generations. Wind generation is usually given the highest priority by assigning zero or negative energy bidding prices in the day-ahead power market, in order to effectively utilize available wind energy. However, when congestions occur, negative wind bidding prices would aggravate negative locational marginal prices (LMPs) in certain locations. The paper determines the proper amount of demand response (DR) load to be shifted from peak hours to off peaks under the Independent System Operator's (ISO) direct load control, for alleviating transmission congestions and enhancing the utilization of wind generation. The proposed mixed-integer linear programming (MILP) model is to minimize the total operation cost while incorporating explicit LMP formulations and non-negative LMP requirements into the network-constrained unit commitment (NCUC) problem, which are derived from the Karush-Kuhn-Tucker (KKT) optimality conditions of the economic dispatch (ED) problem. Numerical case studies illustrate the effectiveness of the proposed model.