Inderscience Publishers

Incentive charge calculation based on counter flow effect

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This paper studies the transmission pricing using optimal power flow when both pool and bilateral system coexist. The paper introduces the evaluation of transmission pricing for all market participants by considering counter flow effects. This approach uses the properties of the mega watt-mile method but takes into account the economic benefits of both trading parties by analysing their shares in negative power flow or counter flow. An analytical approach is used for calculating the incentive charge for individual participant when the multiple wheeling transactions are considered simultaneously. The proposed method allocates the incentive charge over the participants by analysing their shares in negative power flow or counter flow. One case study based on an IEEE 14 bus system is used to illustrate the proposed approach. The results show that the each participant provide with some incentive charges, which encourages the individual participants contribution over the traditional MW-mile approach in the context of revenue reconciliation of transmission services, regardless of transmission arrangement and locations. The main advantage of the developed method lies in its capability to consider multiple wheeling transactions simultaneously.

Keywords: transmission pricing, absolute pricing, counter flow, MW-mile, open access, wheeling charges

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