Transmission cost allocation based on the users’ benefits

•A transmission cost allocation based on user’s benefits is proposed.•We use the capacity of each transmission facility for cost allocation.•We consider to “value of transmission” rather than “use of transmission”. In a competitive electricity market, transmission can be viewed as being in competiti...

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Bibliographic Details
Published in:International journal of electrical power & energy systems 2014-10, Vol.61, p.547-552
Main Authors: Roustaei, M., Sheikh-El-Eslami, M.K., Seifi, Hossein
Format: Article
Language:English
Subjects:
Allocations
Applied sciences
Benefit
Cost engineering
Economics
Electrical engineering. Electrical power engineering
Electrical power engineering
Electricity
Exact sciences and technology
Marketing
Markets
Mathematical analysis
Networks
Operation. Load control. Reliability
Pool market
Power networks and lines
Pricing
Transmission cost allocation
Transmission value
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Summary:•A transmission cost allocation based on user’s benefits is proposed.•We use the capacity of each transmission facility for cost allocation.•We consider to “value of transmission” rather than “use of transmission”. In a competitive electricity market, transmission can be viewed as being in competition with generation. The transmission network indeed allows remote generators to compete with local ones. Thus, transmission benefits are not the same for all and this fact is important in transmission cost allocation method. There are various methods to allocate the transmission costs among the network users; but the most of the proposed methods are only based on the transmission flow (or physical usage). This paper, focusing on transmission cost allocation in an economic way that is based on “users’ benefits”. This method is according to transmission value and direct beneficiaries of transmission which are indirectly related to transmission physical usage. The beneficiaries of each transmission facility are determined for each market participant (consumer and/or producer) by calculating its revenues with and without the facility. The proposed algorithm is applied to a 3-bus and 24-bus IEEE test system and their results are compared to popular Bialek’s tracing method.
ISSN:0142-0615
1879-3517
DOI:10.1016/j.ijepes.2014.03.053