Locational Marginal Pricing
lAn energy price that is calculated at each commercial node based on marginal generation bids for a time period, using a security constrained economic dispatch
lLMP is a marginal price NOT an average price
lAll energy at a commercial node is priced at the LMP
lCongestion between two nodes are valued at the differences between the nodal LMP’s
This is a very basic presentation and does not cover all the many details of the Market. Apologies to you if this is too basic but there are many who have not kept up with the Market development