Key takeaway: The model produces a distinct price at every network node, reflecting congestion on the lines that bind at each point in time. Energy is settled at the Regional Reference Node, as in the real NEM, and losses are applied separately through Marginal Loss Factors.
Dispatch is solved in two stages. The first stage commits generators using simple flow limits between nodes. The second, redispatch stage re-solves dispatch across the network, using line thermal ratings and network topology to determine how power actually flows. This produces a distinct price at every node, reflecting the cost of relieving congestion on the lines that bind at each point in time.
Congestion and losses are priced separately
Nodal prices capture congestion only. Transmission losses are calculated separately and applied through Marginal Loss Factors (MLFs), which scale a generator or load’s output to reflect the real-world losses incurred in delivering that energy to the market. MLFs are derived from the network’s power flows and physical line characteristics, and calibrated against AEMO’s published MLFs. See Marginal Loss Factors for how forecast MLFs are produced from the nodal network.
Energy is settled at the Regional Reference Node
As in the real NEM, each region has a Regional Reference Node (RRN), the node at which energy is settled and where the MLF is fixed at 1.0. Prices and MLFs at every other node are calculated relative to their RRN. Asset-specific revenue forecasts reflect the MLF and locational price at the network node nearest the asset’s connection point, rather than a regional or zonal average.
How the local price and the RRN price interact to shape battery revenues is covered on the Curtailment and Grid Risk page.