A Market Based Approach to Evaluate the Efficiency of Transmission Loss Allocation

Yannick Phulpin (1) , Martin Hennebel (1) , Sophie Plumel (1)

1 SUPELEC-Campus Gif

In the deregulated electrical power system, the allocation of transmission losses is becoming a key issue. The electric transmission power system is more and more constrained due to the increasing volume of power flows, while the active power losses' costs are increasing. In this context, the traditional “postage stamp” allocation is no longer sufficient to give right incentives. One solution could be to charge each actor depending on his responsibilities on the active power losses. This is why a number of transmission loss allocation (TLA) methods have recently been proposed. Their economic impact, however, has rarely been taken into account. This paper resumes the most common TLA methods and designs a frame to compare their efficiency. A simplified market design is proposed in order to evaluate the impact of the integration of transmission loss costs. These methods are applied to the IEEE 14 bus system. An over cost of 1.16% of the global production costs is then estimated for the “postage stamp” allocation while flow based methods reach 0.38%. The influence of the simulation parameters is analyzed.

Keywords: power system economics; load flow analysis; transmission losses; market efficiency

Domains: Electric power

Yannick Phulpin, Martin Hennebel, Sophie Plumel. A Market Based Approach to Evaluate the Efficiency of Transmission Loss Allocation. Modern Electric Power Systems, Sep 2006, Wroclaw, Poland. pp.1-5. ⟨hal-00206056⟩