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P. A. Kuale and J. Tsado University of Benin, Benin City J. C. Ekeh

Third NSF Workshop on US-Africa Research and Education Collaboration Abuja, Nigeria, December 13-15, 2004. Application of Locational Marginal Pricing for Transmission Congestion Management in the Proposed Power Industry Reform in Nigeria. P. A. Kuale and J. Tsado

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P. A. Kuale and J. Tsado University of Benin, Benin City J. C. Ekeh

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  1. Third NSF Workshop on US-Africa Research and Education Collaboration Abuja, Nigeria, December 13-15, 2004 Application of Locational Marginal Pricing for Transmission Congestion Management in the Proposed Power Industry Reform in Nigeria P. A. Kuale and J. Tsado University of Benin, Benin City J. C. Ekeh Ambrose Alli University, Ekpoma

  2. Outline • Objectives • Existing Market Structure • Proposed Nigerian Power Industry Reform • Consequences of Reform • Review of Loadflow Studies • Findings Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  3. Outline • Concepts of Locational Marginal Pricing (LMP) and its Impact on the Proposed Electricity Reform • Applications • Conclusions and Future Work Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  4. Objectives • Review of the state-of-the-art of the loadflow studies of the transmission lines under existing and proposed IPPs • Identification of critical nodes/buses • Define LMP and it can be used to check transmission congestion Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  5. Consequences of Reform • Increase of reliability of power supply • Overall increase in power consumption • Increase in competition among generating plants • The results of (2) and (3) could result in congestion • The consequence of (4) could result in different energy prices throughout the network • Adoption of appropriate pricing policies to check transmission congestions Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  6. Congestion Management • Reschedule system generation • The use of locational marginal pricing • Other methods: postage-stamp rate, contract path, MW-mile, ATC, etc Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  7. Findings • Shiroro-Kaduna line was overloaded by 18.65% • Ajaokuta busbar exceeds max acceptable voltage of 1.05 pu – the bus voltage was 1.062 pu • Shiroro and Afam GS exceeded their Var limits – the values were 2.60 and 1.59 pu, respectively Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  8. Findings • Jebba GS and Delta GS absorb min Var of -2.0 pu and -2.49 pu, respectively • Kaduna (0.9025 pu), Kano (0.8268 pu), Jos (0.7858 pu), and Gombe (0.6397 pu) all recorded low voltages • There is the need for appropriate pricing mechanism for transmission congestion management Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  9. Locational Marginal Pricing • The LMP is the spot price which is based on the principle that a unit of power has different prices at different points in the network. The main reason for this spatial discrimination in energy prices are transmission losses and congestion • LMP is defined as the minimum cost of supplying one additional MW of load as the load bus without violation of any transmission limits, based on the bidding prices of power supply and power load at the buses in the system • The major factors affecting the LMP values are generator bid prices, transmission system elements that are experiencing congestions, the losses in the system, and the electrical characteristics of the system Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  10. Locational Marginal Pricing • Usefulness of LMP • To calculate the revenue of GENCOs for supplying electric power and the expenditure of DISCOs for using electric power • It can be used for the transmission congestion management • It can be used for transmission network planning to improve the secure operation network of the power system • To guide TRANSCOs’ capital investments Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  11. Applications of LMP • At the Shiroro GS busbar/node – this will take care of the Shiroro-Kaduna line, Kaduna-Kano line, Kaduna-Jos line, and Jos-Gombe line • At the Ajaokuta load bus because of the max acceptable voltage of 1.05 pu was exceeded. Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

  12. Conclusions and Future Work • The existing system is weak to cope with the proposed electric power reform • LMP will help to alleviate transmission congestions • The above will save the grid from high losses, occasional trippings, voltage as well as system instability Third US-Africa Research and Education Collaboration Workshop Abuja, Nigeria, December 13-15, 2004

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