IEEE INDICON 2015 1570163447

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Distribution system nodal pricing analysis with

realistic ZIP load and variable wind power source
Sooraj Narayan K, Ashwani Kumar
Department of Electrical Engineering
NIT Kurukshetra
Haryana, India
soorajn14@gmail.com, ashwa_ks@yahoo.co.in
reduction. Similarly, if the DG integration causes the network
losses to increase, the nodal price values will increase.

AbstractElectric distribution system has undergone a lot of

changes in the recent past due to the rapid deregulation of the
power market. Consequently, the analysis of distribution system
pricing has acquired a great deal of interest. Nodal pricing is a
financially effective pricing methodology generally used in
transmission systems. Under the present scheme of states, it is
admissible to utilize nodal pricing in distribution systems as well.
This paper presents a study on nodal pricing in distribution
systems and the impacts of wind energy penetration on the nodal
prices of radial distribution network on an hourly basis. The
impacts of realistic ZIP loads on the nodal prices have also been
studied. A comparison is carried out between the nodal prices for
a) without wind integration b)with wind integration and c)with
wind integration and realistic ZIP load. The nodal prices are
obtained using marginal loss coefficients (MLCs). The entire
study is conducted on an IEEE 33 bus radial distribution system.

In [6], the authors proposed two new methodologies to

effectively allocate the losses in distribution systems with
dispersed generation. The referenced paper used marginal loss
coefficients and direct loss coefficients to deduce the nodal
prices in a radial distribution system. The impacts of renewable
energy penetration on both nodal price and nodal reliability of
a restructured power system was studied in [7]. This paper also
takes into account the intermittent nature of renewable
generation. In [8], an optimal allocation strategy for DG
placement based on nodal pricing was discussed. In [9], the
authors discussed the effectiveness of nodal pricing in
distribution networks for efficient pricing and for properly
rewarding the DG companies for loss reduction. In [10], a
comprehensive comparison of various procedures used for the
allocation of losses in a distribution system under the market
environment was discussed. The effects of solar energy
penetration on the nodal prices of a power system were
discussed in [11]. In [12], the system effects of an intermittent
wind power source on the economics of the distribution
networks were analyzed with the help of nodal pricing and
amp-mile pricing methodologies.

KeywordsDistribution System, Nodal Pricing, Wind Energy

Penetration, Realistic ZIP Loads, Marginal Loss Coefficients

I. INTRODUCTION
Restructuring and deregulation of power systems has led to
an increased amount of Distributed Generation (DG)
penetration in the distribution system [1]. The various technical
and economic benefits of integrating DGs into the power
systems has been studied well in the past [2]. Due to their costeffectiveness and the inherent environmental viability, the
renewable energy sources are preferred among various DGs
[3].

This paper analyses the impacts of intermittent wind power

generation on the nodal price values of a distribution network
on an hourly basis. Wind power outputs for 24 hours are
simulated using Weibull probability distribution function. A
simple method for hourly wind power output determination
based on maximum probability of occurrence is utilized. In
addition, the effects of realistic ZIP load models on the nodal
prices are also taken into consideration. This study can help
extensively in analyzing the hourly impacts of variable wind
power output on the pricing of realistic radial distribution
systems.

The strategies and techniques adopted for the planning and

operation of the traditional unidirectional power systems have
to be modified and reconstructed with the integration of DGs
into the distribution systems. This is mainly because of the fact
that DGs convert the formerly passive distribution system into
an active one. Hence, the techniques applied for transmission
system pricing can be utilized for distribution systems also.
The rest of the paper is as follows: Section II discusses the
Nodal pricing has been used to effectively study the economics
nodal pricing methodology using marginal loss coefficients
of the transmission systems in the past [4]. Recently, nodal
(MLCs). Section III discusses the various aspects regarding
pricing was introduced to the distribution system analysis
load, wind speed and wind turbine power output modeling.
arena. Nodal pricing is an efficient methodology to calculate
Section IV deals with wind power leveling. Section V deals
the marginal cost of energy and cost of losses in a distribution
with various simulation case studies and results of the study. In
system. It can properly reward the DG companies for
this paper, a standard IEEE 33 bus radial distribution test
minimizing the active and reactive power losses in the system
system is considered as the test system. A program was
and send the precise price signals for optimal location of DG
developed in MATLAB 7.1. The program was run on an
placement [5]. In case of an ideal DG interconnection, the
Intel Core(TM) i7-3770 3.70 GHz processor.
nodal price values must reduce since the DG contributes to loss
978-1-4673-6540-6/15/$31.00 2015 IEEE

cos

II. NODAL PRICING APPLIED TO DISTRIBUTION NETWORKS

Nodal prices for a distribution system are derived in the
same manner as done for a transmission system. In order to
obtain the nodal prices at each bus of a distribution system, the
MLCs have to be defined first. MLCs are coefficients that
indicate the marginal or incremental deviation in total active
power loss due to the changes in active and reactive power
injections at a particular node of the system [13].

(1)

and
are the active and
where is the total power loss,
reactive power MLCs at node of the system respectively.

sin

(13)

cos

(14)

cos

(15)

sin

(3)

(16)

cos

where , are the voltage magnitudes at the sending and

and
are the voltage
receiving end nodes respectively,
angles,
and
are the conductance and susceptance of the
element of the Y-bus matrix respectively and is the
total number of nodes in the system.

(4)

(12)

cos

From this equation, the derivative of loss with respect to

voltage angles and magnitudes can be derived as follows:

The connection point between the distribution and

transmission system is called as the power supply point (PSP).
If is the electricity price (in USD/MWh) or the active power
price at PSP, then the nodal prices of active and reactive
powers at various nodes can be obtained as follows:
1

(11)

sin

The total loss of the distribution system is given by:

(2)

cos

sin

(10)

sin

and
are the active and reactive power nodal
where
prices at node of the system respectively. The reactive power
price at PSP is taken as zero.

B. Reconciliated Marginal Loss Coefficients

The approximate total losses of the system can also be
obtained from the MLCs as follows:

A. Determination of Marginal Loss Coefficients

The active and reactive power MLCs are determined using
the Jacobian matrix method used in [14]. This method of
determining the MLCs was proposed by the authors in [6]. The
method is designed based on the fact that there exists no direct
correlation between the power losses and power injections.
Hence, the intermediary variables such as bus voltages and
angles obtained from AC power flows, are utilized to
determine the MLCs.

(17)

where and
are the active and reactive power injections at
node respectively. As concluded by authors in [6], it was
observed that the value of losses approximated using MLCs
were almost as twice as the actual losses of the system. This
leads to over estimation of the nodal prices of the system.
Hence, the MLCs have to be adjusted in order to estimate the
exact cost of losses, which is done using the factor of
reconciliation (
.

The following sets of linear equations are utilized in this

method.

(18)

(5)

With the application of reconciliation, the new active and

reactive nodal prices are obtained as shown below:
sin

sin

cos

(6)

cos
cos

(7)

sin

(19)
(20)

III. LOAD AND WIND POWER SOURCE MODELING

(8)

sin
cos

A. Load Modeling
The realistic time varying load model which is voltage
dependent is used in this work. For each hour of the study, the

(9)

load is assumed to be a combination of residential, industrial

and commercial loads.

samples. The mean power output of each power level is

multiplied by the probability of occurrence of that level to get
that actual wind turbine output for that level.

(21)

(22)

where

where is the wind speed,

the scale parameter .

is

(24)

0,
where
is the power output of wind turbine in MW,
is the
is the cut-out speed
cut-in speed of the wind turbine in m/s,
of the wind turbine in m/s,
is the rated speed of the wind
turbine in m/s, is the rated power output of the wind turbine
and
.
in MW,

IV. LEVELING OF WIND POWER OUTPUTS

Weibull distribution function is used to produce samples of
wind power output for each hour of the study. Then, for each
hour, the power outputs are leveled into
number of levels.
Each level represents a power range of the wind turbine power
output. Let each level of wind power output be represented as
, where is the level index. Then, the probability of
occurrence of every wind power level is calculated as:
,

(27)

0.25
0.2
Probability

B. Wind Power Leveling

For each hour of the study, the power output samples are
divided into power levels. The number of power levels (
is
is the average
selected as 12. The mean power output (
of that particular range. Then, according to Equation (), the
probability of occurrence of each power level is determined
(
, , shown in Fig. 1. The actual power output of each
, for each hour is determined using (26).
level, i.e.
,
Based on the maximum probable power for each hour for 1
wind turbine, the wind power outputs are decided for 20 wind
turbines by multiplying it by 20. The wind power outputs thus
obtained for each hour is shown in Fig. 2.

The location for placing the wind turbine in the test system
is determined using a voltage stability index (VSI) proposed by
U. Emingolu and M. H. Hocauglu in [17].

max

A. Wind Power Output Samples Calculation

The wind turbine selected has the following parameters:
2.5 m/s, =13 m/s,
=25 m/s and =0.6 MW [19].
The wind farm is integrated at bus number 18 of the test system
as this is the most voltage sensitive bus of the system obtained
from VSI calculations. A total of 20 wind turbines of the same
rating are assumed to be present in the farm. The wind turbines
are assumed to be operating at unity power factors. The mean
and standard deviation of wind speed for each hour of 24 hours
of a day are obtained from historical wind speed data collected
for an entire year [20]. After that, 15000 power output samples
from wind speed samples obtained for each hour of the day is
calculated using (24).

0,
,

The study is conducted on a standard IEEE 33 bus radial

distribution system [18]. The tests system has a base power of
100 MVA and a base voltage of 12.66 kV. The net active
power demand is 3.72 MW and the reactive power demand is
2.30 MVAR. The price of electricity at PSP ( is taken as 44.5
USD/MWh [9]. For this study, the nodal prices calculated from
the reconciliated marginal loss coefficients are compared as
these have been proved to provide more accurate results.

The power output for a pitch-controlled wind turbine can be

expressed using the linear model [17]:

(26)

V. SIMULATION CASE STUDIES AND RESULTS

(23)

is the shape parameter and

is the mean power output of level

B. Wind Power Modeling

Due to the frequent variation of wind speed at any location,
it is assumed to be a random variable. In this study, the Weibull
probability distribution function [16] has been used to model
wind speed, which is defined mathematically as:

For each hour, the output power of wind turbine is

determined as:

where
,
and
are the fractions of residential,
commercial and industrial load for time at each bus of the
,
and
are the
system, as shown in Table I.
active power, reactive power and voltage at bus for time
respectively. is the nominal voltage of the system(1.00 p.u.).
The active and reactive power exponents and the fraction of
residential, industrial and commercial loads for each hour used
taken from [15].

,0

(25)

0.15
0.1
0.05
0
25

where,
, is the probability of occurrence of wind power
level and hour , , is the number of wind power samples in
level and hour and is the total number of wind power

20

15

10
Hours

0 0

Fig. 1. Probability of power levels for 24 hours

10
8
6
Power level index

12

Fig. 5 shows the wind power penetration (%) in the system

for 24 hours of study. Fig. 6 and Fig. 7 shows the variation of
active and reactive power nodal prices for 24 hours at bus 18 of
the test system, where the wind farm is located. The hourly
variation in nodal prices at bus 18 can be observed from these
figures. It is evident from Fig. 5 that the minimum values of
active power nodal prices after wind integration is obtained for
hour 7 with and without ZIP load. Without ZIP load, the value
of nodal price with wind integration for hour 7 is 44.6335
USD/MWH and with ZIP load, the value is 44.5229
UDS/MWh. It can be noted from Fig. 2 that hour 7 has the
maximum wind power output of all hours. Hence, the high
wind power penetration has led to higher reduction in nodal
prices. Similarly, on comparing Fig. 5 and Fig. 6, it can be
observed that as the wind power output goes lower in hours 12
to 20, the nodal price reduction is also lower. A similar
variation can be observed in case of reactive power nodal
prices from Fig. 7.

Wind power outputs for 24 hours (kW)

900
850
800
750
700
650
600
550
500
450

10

12
Hours

14

16

18

20

22

24

Fig. 2. Wind power outputs for 24 hours

C. Comparison of Nodal Prices

The comparison of nodal prices can be done be observing
the results of any one randomly selected hour of the study. Fig.
3 and Fig. 4 shows the active and reactive power nodal price
variations for 4th hour of the study with: Normal load without
wind, normal load with wind, ZIP load without wind and ZIP
load with wind respectively. From Fig. 3, it can be observed
that the active power nodal price with normal load without any
wind integration for 4th hour has a maximum value of 48.7037
USD/MWh for bus 19. This value is reduced to 45.1049
USD/MWh with the integration of wind. Similarly, with ZIP
load, the nodal price at bus 19 for hour 4 is 48.0477
USD/MWh, which is less than that with normal load. Again
with the integration of wind with ZIP load, the nodal price
reduces to 44.9859 USD/MWh at bus 19. This shows that there
is a significant reduction in nodal prices with wind integration.
Also, there is a notable difference in nodal price values when a
realistic ZIP load is considered, which can be assumed to be a
more realistic modeling of the real time distribution system. A
similar variation is observed for reactive power nodal prices
from Fig. 4.

Fig. 8 to Fig. 15 shows the complete 24 hour variation of

the active and reactive power nodal prices for all the scenarios
in detail.
Wind power penetration (%)

24

46
45.5

10

15

20

25

30

35

Fig. 3. Active power nodal price comparison for various scenarios for hour 4

10

12

14

16

18

20

22

24

46

10

12

Hours

14

16

18

20

22

24

Fig. 6. Active power nodal price comparison for 24 hours at bus 18

Normal load without wind

Normal load with wind
ZIP load without wind
ZIP load with wind

2.8
2.6

Nqi (USD/MVARh)

Nqi (USD/MVARh)

Normal load without wind

Normal load with wind
ZIP load without wind
ZIP load with wind

47

44

Bus number

1.5
1
0.5
0
0

45

45

2.5

48

46.5

14

49

47

44.5
0

16

Fig. 5. Wind power penetration for 24 hours

Npi (USD/MWh)

Npi (USD/MWh)

48

18

Hours

Normal load without wind

Normal load with wind
ZIP load without wind
ZIP load with wind

47.5

20

12

49
48.5

22

2.4
2.2
2
1.8

Normal load without wind

Normal load with wind
ZIP load without wind
ZIP load with wind

1.6

10

15

20

25

30

1.4

35

10

12

14

16

18

20

22

Hours

Bus number

Fig. 7. Reactive power nodal price comparison for 24 hours at bus 18

Fig. 4. Reactive power nodal price comparison for the scenarios for hour 4

24

Reactive power nodal prices with normal load and without wind integration

Active power nodal prices with normal load and without wind

Nqi (USD/MVARh)

Npi (USD/MWh)

49
48
47
46
45
30
20

Bus number

10
0

10

15

20

2
1
0
40
30

25

20

Bus number

Hours

25

20

15

10

Hours

Fig. 12. Reactive power nodal prices with normal load and without wind

Fig. 8. Active power nodal prices with normal load and without wind

Reactive power nodal prices with normal load and with wind integration

Active power nodal prices with normal load and wind integration

Nqi (USD/MVARh)

48

Npi (USD/MWh

10

47
46
45

2
1
0

44
40
30
20

Bus number

10
0 0

10

15

20

30

25

20

Bus number

Hours

Fig. 9. Active power nodal prices with normal load and integration

10
0

15

10

20

25

Hours

Fig. 13. Reactive power nodal prices with normal load and wind integration

Active power nodal prices with ZIP load and without wind

Reactive power nodal prices with ZIP load and without wind

Nqi (USD/MVARh)

Npi (USD/MWh)

48
47
46
45

1.5
1
0.5
0
30

30
20

Bus number

10
0 0

10

15

20

25

20
10
0

Bus number

Hours

15

10

20

25

Hours

Fig. 14. Reactive power nodal prices with ZIP load and without wind

Fig. 10. Active power nodal prices with ZIP load and without wind

Reactive power nodal prices with ZIP load and with wind integration

Active power nodal prices with ZIP load and with wind integration
2

Nqi (USD/MVARh)

Npi (USD/MWh)

47
46
45

1.5
1
0.5
0
30

44
30
20

Bus number

10
0 0

10

15

20

20

25

10

Bus number

10

15

20

Hours

Hours

Fig. 15. Reactive power nodal prices with ZIP load and wind integration
Fig. 11. Active power nodal prices with ZIP load and wind integration

25

On comparing Fig. 8 with Fig. 9, and Fig. 12 with Fig. 13,

it is observed that there is a dynamic variation in the active and
reactive nodal prices of the system for 24 hours with the
integration of an intermittent wind power source. A similar
comparison can be made in case of wind power integration
with ZIP loads. On comparing Fig. 8 with Fig. 10, it is evident
that the nodal prices with realistic ZIP loads in consideration
are lower compared to the nodal prices with normal load.

[8]

[9]

[10]

VI. CONCLUSIONS
[11]

This paper analyzed the impact of wind power integration

on the nodal prices of radial distribution system. The effects of
incorporating a realistic ZIP load on the nodal prices are also
studied. The intermittency of the wind turbine power output is
also included for the study. The results show that there is a
significant reduction in nodal prices with the integration of
wind energy sources. Also, the variability of wind power
output is observed to cause noteworthy deviations in the nodal
prices of the distribution system. These deviations are
important as the volatility of wind power outputs leads to
volatility in the nodal prices of the system. On summarizing,
the nodal prices of a distribution system are affected by the
random variation of wind energy output. Even though the nodal
prices are reduced, which is beneficial for the consumers, the
increased penetration of irregular renewable penetration
increases the uncertainty of nodal prices. This study can be
further extended by observing the impacts of other renewable
energy sources like solar power penetration on the nodal prices
of distribution systems.

[12]

[13]

[14]

[15]

[16]

[17]

ACKNOWLEDGMENT
This work is carried out under the project grant
SR/S3/EECE/0035/2012, SERB, New Delhi. The authors
acknowledge DST New Delhi for grant of the project.

[18]

[19]

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<http://rredc.nrel.gov/solar/new_data/India/about.html>[accessed
1.04.2014]
TABLE I. COEFFICIENTS OF RESIDENTIAL, COMMERCIAL,
INDUSRIAL LOADS FOR EACH HOUR

Hour

Hour

Hour

0.66

0.17

0.17

0.1

0.34

0.56

17

0.2

0.44

0.36

0.63

0.17

0.2

10

0.11

0.33

0.56

18

0.33

0.47

0.2

0.6

0.18

0.22

11

0.12

0.37

0.51

19

0.6

0.3

0.1

0.58

0.2

0.22

12

0.17

0.46

0.37

20

0.7

0.23

0.06

0.6

0.23

0.17

13

0.14

0.37

0.49

21

0.74

0.19

0.07

0.55

0.15

0.3

14

0.14

0.39

0.47

22

0.76

0.15

0.09

0.3

0.14

0.56

15

0.15

0.46

0.39

23

0.75

0.15

0.1

0.11

0.32

0.57

16

0.18

0.41

0.41

24

0.71

0.16

0.13