IEEE Power & Energy Magazine - July/August 2016 - 47

help mitigate a situation of scarcity, but only if they know
that this stressful situation exists.
The immediate question is why not extend the lMP concept to the distribution network, all the way to the end-network
users or at least to the low-voltage distribution transformers,
thus guaranteeing that DeRs receive the correct locational
value of the economic signals for energy. The network charges
should also be differentiated accordingly. extending the calculation of lMPs to the distribution network appears to be
conceptually simple, although difficult computational issues
appear when the distribution network and DeRs response are
represented in detail, as shown by Prof. Michael caramanis
and his collaborators at Boston university.
here a simplified representation of the spanish network
will be used to show that locational signals at distribution
level do matter regarding DeRs response in a case example
designed by Dr. José Pablo chaves-avila and Prof. Tomás

gómez at IIT-comillas university. The streamlined network
in figure 9 is equivalent to the complete network in terms of
the share of losses at the different voltage levels. This network is used to estimate the differences in lMPs between
voltage levels just because of technical losses. Differences of
up to 40% are shown to exist, which can make all the difference in the viability of investing in a given DeR or whether
to operate it or not at a given time. note that in the operating
conditions shown in figure 9, the power flows trickle down
and the lower the voltage the higher the lMP. The situation
would be exactly the opposite in an exporting, instead of importing, mode.
It is understood that some of the ideas in this article, with a
new integral vision of the network and the prices and charges,
may clash with the established procedures. The adoption
of these ideas, in any case, will not be easy. note that some
aspects can be implemented piecemeal, like, for instance,

P = 53.97 €/MWh

N1

400 kV

P = 54.91 €/MWh

N2

220 kV

P = 63.86 €/MWh
132 kV

N3

+42%
P = 56.32 €/MWh
60 kV

P = 66.68 €/MWh
60 kV

< 1 kV
P = 60.70 €/MWh
N6.1

N6.2

< 1 kV
P = 67.76 €/MWh
N6.3

P = 66.37 €/MWh
20 kV

N5.3

P = 75.45 €/MWh
< 1 kV

N5.2

P = 58.78 €/MWh
20 kV

P = 55.74 €/MWh
20 kV

N5.1

N5.4

N6.4

P = 69.63 €/MWh
20 kV

N4.2

N4.1

< 1 kV
P = 76.65 €/MWh

figure 9. Distribution LMPs considering aggregated distribution losses for the Spanish system.
48

ieee power & energy magazine

july/august 2016



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IEEE Power & Energy Magazine - July/August 2016 - Cover3
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