Knowledge Base

Can I have negative marginal prices? What do they mean?

Yes, in highly congested systems you can in fact see negative LMP’s at a bus (or buses). This is always coupled with high LMP’s at other buses.  A negative LMP means that serving an additional MW of load at the negative LMP bus will reduce the operating cost. More flow to the load creates a counter-flow that tends to mitigate congestion in an element. This allows for dispatch of cheaper generation, thereby decreasing the overall operating cost.

Tags: ,,

July 5, 2012