The implementation of locational marginal pricing in Kerman's Electricity Transmission Network

Considering the competitive milieu of electricity industry and the emergence of different energy markets, energy price and the ways of determining it are among the most important issues which play a key role in plans of the producing companies, buyers and the system users. In the recent years, locational marginal pricing in electricity market has become under the spotlight of the world’s great electricity markets. This study focuses on the implementation of the locational marginal pricing in Kerman’s electricity transmission network in 2012. The results showed that due to the density of the transmission network, implementation of locational marginal pricing has caused different prices in different system buses, and the new prices are higher than the present existing prices in Kerman’s electricity transmission network which means the increase of producers’ profit. The constant increase of price elasticity in proportion to the distance shows that the change of prices in relation with the distance variable increases the market’s potential of monopoly.