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Fix the energy market
Draft

PJM-style Locational Marginal Pricing

A centrally optimised nodal market in which wholesale prices reflect marginal energy cost, transmission congestion and losses, supplemented by capacity and ancillary-service markets.

Solution section

Retail

The retail-market and consumer-facing layer.

Retail

Retail design remains institutionally separate from the LMP engine.

Consumers may be exposed to wholesale locational signals to varying degrees depending on tariff design, regulation and aggregation.

The existence of a nodal wholesale price therefore does not imply that every consumer directly responds to nodal prices.