In power systems with a large amount of wind power plants, the supply and demand balance control is an important issue. In particular, uncertain output fluctuation depending on weather condition gives a large impact on frequency regulation. Moreover, the wind power fluctuation causes power flow issues such as loop power flow. Thereby, proper congestion management of transmission lines with ensuring the control reserve for frequency regulation is necessary to keep the system stable under the large fluctuation of renewable energy sources. On the other hand, recently, the balancing power has been traded in balancing market worldwide in order to promote the economic balancing control. It is planned that the balancing market will be newly established in the near future also in Japan. Hence, this paper presents an application of locational marginal price (LMP) to the balancing market and an optimal method to determine the LMP in the balancing market for tertiary control considering not only supply and demand balance but also power flow issue and secondary control reserve. The proposed method was tested in IEEE 39 bus system model and its effectiveness was shown.
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