A Locational Price for Power Injection Fluctuations of Variable Generation and Load

Abstract

In this paper we calculate the incremental system production cost associated with a measure of locational power injection uncertainty that can be interpreted as a locational price for tracking power fluctuations. This "Locational Price of Variability (LPV)" can be used to allocate charges for regulation reserves by location, and hence, can also be used to value distributed energy storage employed to mitigate such fluctuations. We consider policy changes that could enable the implementation of the LPV.