A Linearized Optimal Power Flow Framework for Locational Marginal Pricing and Risk Management in Wind-Integrated Power Systems with Disaggregated Flexible and Contingency Reserve Modeling

Tamimi, Mohammadhossein

doi:10.30511/pcdp.2026.2092024.1085

A Linearized Optimal Power Flow Framework for Locational Marginal Pricing and Risk Management in Wind-Integrated Power Systems with Disaggregated Flexible and Contingency Reserve Modeling

Articles in Press

Document Type : Original Research

Author

Mohammadhossein Tamimi

Faculty of Electrical Engineering of K. N. Toosi University of Technology

10.30511/pcdp.2026.2092024.1085

Abstract

The increasing penetration of wind power has made Optimal Power Flow (OPF) studies more dependent on uncertainty modeling, reserve allocation, and accurate market-price calculation. This paper develops a linearized OPF framework for evaluating Locational Marginal Prices (LMPs) and reserve requirements in wind-integrated power systems. The model distinguishes between flexible ramping reserves and contingency reserves and includes constraints that prevent thermal units from assigning the same unused capacity to both products. To improve the accuracy of the conventional Direct Current Optimal Power Flow (DC-OPF) while preserving a linear structure, transmission losses are represented through a loss-approximated formulation. The proposed model is tested on the IEEE 118-bus system using GAMS and MATPOWER. The results show that reserve separation affects both dispatch decisions and nodal LMPs, especially under wind-power deviations. A sensitivity study also shows that changing the objective from generation-cost minimization to active-power-loss minimization reduces network losses from 69.3 MW to 18.4 MW, at the expense of a higher generation cost.

Keywords

Linearized Optimal Power Flow

Locational Marginal Pricing (LMP)

Wind Power Integration

Flexible Reserve

Contingency Reserve

IEEE 118-bus system

Subjects