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A New Method for Efficient Transmission Losses Allocation in Electricity Markets Without Losses Consideration in The Dispatch
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Due to the development of new technologies, change of generation mix and appearance of newly formed energy supply hubs, there is a large year‐on‐year change in the marginal loss factors in power systems. Since any change of marginal loss factors could have significant impacts on payment of loads and profitability of generators, it is necessary to carry out a comparative study on the loss factor‐based locational marginal pricing methods. Considering that a systematic comparison of various locational marginal pricing methods has not been reported in existing publications, this work presents a comparative study of the loss factor‐based locational marginal pricing methods that are widely adopted in electricity markets. Advantages and disadvantages of each locational marginal pricing method are explored in detail, and could serve as references in selecting appropriate locational marginal pricing methods in practice. The selected five locational marginal pricing models are tested in two standard power systems, that is, the IEEE 5‐bus and 39‐bus systems. Then, through numerical experiments and detailed analysis, key findings about the reference point dependency of loss factors, accuracy of loss estimation, load payment, generation income, and market settlement surplus are summarised and elaborated. It is found that marginal loss factors‐based locational marginal pricing methods tend to produce a higher market settlement surplus and can lead to a lower generation income than other locational marginal pricing methods.
Marginal cost pricing is widely recognized as the core of any sound approach to economic valuation of transmission services. This paper presents results that help to recognize and to compute the several components of the spot prices, so that the contributions of each user to the network costs can be identified and understood. The paper analyzes, both theoretically and computationally, the potential use of a decomposition of the spot price ρk of any node k into a generator component γ and a network component ηk, which is a prerequisite to precisely define separate markets for generation and transmission. The notions of "slack node" and "system lambda" are revisited and several new properties of the spot prices, which can be useful in interpreting the numerical values of network spot prices in large power systems, are presented. The results have been checked in large networks and are illustrated with numerical examples.
Large deployment of distribute energy resources and the increasing awareness of end-users towards their energy procurement are challenging current practices of electricity markets. A change of paradigm, from a top-down hierarchical approach to a more decentralized framework, has been recently researched, with market structures relying on multi-bilateral trades among market participants. In order to guarantee feasibility in power system operation, it is crucial to rethink the interaction with system operators and the way operational costs are shared in such decentralized markets. We propose here to include system operators, both at transmission and distribution level, as active actors of the market, accounting for power grid constraints and line losses. Moreover, to avoid market outcomes that discriminate agents for their geographical location, we analyze loss allocation policies and their impact on market outcomes and prices.
The above difference may be what essentially distinguishes electricity transmission from distribution, the two network-infrastructure-based natural monopolies. Transmission facilities can be evaluated one by one for suitability; by contrast, any regulatory scheme for distribution must acknowledge from the outset that each and every investment made by a distributor cannot possibly be controlled and that more aggregated or global evaluation mechanisms are required.
This addition to the ISOR series introduces complementarity models in a straightforward and approachable manner and uses them to carry out an in-depth analysis of energy markets, including formulation issues and solution techniques. In a nutshell, complementarity models generalize: a. optimization problems via their Karush-Kuhn-Tucker conditions b. on-cooperative games in which each player may be solving a separate but related optimization problem with potentially overall system constraints (e.g., market-clearing conditions) c. conomic and engineering problems that arent specifically derived from optimization problems (e.g., spatial price equilibria) d. roblems in which both primal and dual variables (prices) appear in the original formulation (e.g., The National Energy Modeling System (NEMS) or its precursor, PIES). As such, complementarity models are a very general and flexible modeling format. A natural question is why concentrate on energy markets for this complementarity approach? s it turns out, energy or other markets that have game theoretic aspects are best modeled by complementarity problems. The reason is that the traditional perfect competition approach no longer applies due to deregulation and restructuring of these markets and thus the corresponding optimization problems may no longer hold. Also, in some instances it is important in the original model formulation to involve both primal variables (e.g., production) as well as dual variables (e.g., market prices) for public and private sector energy planning. Traditional optimization problems can not directly handle this mixing of primal and dual variables but complementarity models can and this makes them all that more effective for decision-makers.
This paper presents a new approach to the transmission loss allocation problem in a deregulated system. This approach belongs to the set of incremental methods. It treats all the constraints of the network, i.e. control, state and functional constraints. The approach is based on the perturbation of optimum theorem. From a given optimal operating point obtained by the optimal power flow the loads are perturbed and a new optimal operating point that satisfies the constraints is determined by the sensibility analysis. This solution is used to obtain the allocation coefficients of the losses for the generators and loads of the network. Numerical results show the proposed approach in comparison to other methods obtained with well-known transmission networks, IEEE 14-bus. Other test emphasizes the importance of considering the operational constraints of the network. And finally the approach is applied to an actual Brazilian equivalent network composed of 787 buses, and it is compared with the technique used nowadays by the Brazilian Control Center.
This paper presents an optimal power flow formulation in which the generation is dispatched in order to compensate for losses allocated to different transactions. Since the loss allocation itself depends on the solution, the two problems are combined and solved together. Loss allocation scheme developed by the authors earlier [Ding Q, Abur A. Transmission loss allocation in a multiple-transaction framework, IEEE Trans Power Syst 2004;19(1):214–20] is used in this formulation. It is assumed that each transaction is entitled to select its own designated generators to compensate for its allocated losses. The case where some transactions prefer instead to let the independent system operator (ISO) to provide the loss compensation service is also considered. An optimization procedure, which yields the least-cost compensation from participating generators, is developed for this purpose by using an OPF model. Several numerical examples are included to demonstrate the proposed procedures.
This paper presents a methodology for active transmission loss allocation based on AC power flow and sensitivity techniques. Loss factors for active power consumers and suppliers are calculated through the sensitivities of total losses with the increase of active power in each bus and indicate the portion of losses that must be attributed for each market participant for a given scenario. The idea is to allocate the active power transmission losses by means of sensitivity theory, where the loss factors are obtained by an analytic expression obtained from the AC power flow equations. This technique is applied to the Brazilian North-Northwest system composed by 398 buses. An AC incremental method for loss allocation, based on repetitive power flow calculations, is also presented in this paper to provide a comparison basis for the proposed sensitivity methodology. The sensitivity technique showed to be simple and easy to understand and to implement. The loss factors do not depend on the slack bus, as well as the sensitivity methodology provides results close to the ones offered by the repetitive incremental method but, it requires much lower computational effort
This paper proposes a systematic method to allocate the power flow and loss for deregulated transmission systems. The proposed method is developed based on the basic circuit theories, equivalent current injection and equivalent impedance. Four steps are used to trace the voltages, currents, power flows, and losses contributed by each generator sequentially. Using this method, the real and reactive power on each transmission lines and their sources and destinations can be calculated. The loss allocation of each line, which is produced by each generator, can also be obtained. Test results show that the proposed method can satisfy the power flow equation, the power balance equation and the basic circuit theories. Comparisons with previous methods are also provided to demonstrate the contributions of the proposed method.
An analysis of the performance of six major methods of loss allocation for generators and demands was conducted, based on pro-rata (two), on incremental factors (two), on proportional sharing (PS) (one), and on electric circuit theory (one). Using relatively simple examples which can easily be checked, the advantages and disadvantages of each were ascertained and the results confirmed using a larger sample system (IEEE-118). The discussion considers the location and size of generators and demands, as well as the merits of the location of these agents for each configuration based on an analysis of the effect of various network modifications. Furthermore, an application in the South-Southeastern Brazilian Systems is performed. Conclusions and recommendations are presented.
Competition in electricity markets requires the identification of
the responsibilities in the use of transmission networks or the
associated effects. For instance, the participation of generating
utilities in losses caused in a specific line. A proportional sharing
principle was used by many authors to elaborate a power-flow tracking
algorithm. A new method is presented to assess the power output flowing
from a specific generator to a specific load. The justification of the
method is based on concepts of electric circuit theory. Its practical
implementation requires only to compute a load flow and solve a linear
equation system. The method is applied to determine influence areas and
to allocate losses among participants that share the network. An example
of the determination of influence areas is presented and it is compared
with the methodology applied in Argentina and Chile which is based on
incremental methods
In this paper, the issue of how transmission power losses should
be allocated is addressed. First, it is shown that existing
methodologies allocate interaction components regardless of the size of
the involved partners. Then, several alternatives to split those terms
are suggested which somehow take into account the relative contribution
of each transaction. Although the ideas are presented by resorting to
unbundled branch power flows, the proposed schemes are applicable on a
nodal basis. A real example is finally included showing that the total
losses assigned to a transaction may differ significantly depending on
the allocation methodology adopted
In a competitive environment, usage allocation questions must be
answered clearly and unequivocally. To help answer such questions, this
paper proposes a method for determining how much of the active and
reactive power output of each generator is contributed by each load.
This method takes as its starting point a solved power flow solution.
All power injections are translated into real and imaginary currents to
avoid the problems arising from the nonlinear coupling between active
and reactive power flows caused by losses. The method then traces these
currents to determine how much current each source supplies to each
sink. These current contributions can then be translated into
contributions to the active and reactive power output of the generators.
It is also shown that the global contribution of a load can be
decomposed into contributions from its active and reactive parts. This
decomposition is reasonably accurate for the reactive power generation.
To determine the contributions to active power generation, the
previously-described method based on the active power flows is
recommended
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