SENSITIVITY BASED METHOD FOR

TRANSMISSION PRICING
UNDER OPEN ACCESS

A DISSERTATION
Submitted in partial fulfillment of the
requirements for the award of the degree
of
MASTER OF TECHNOLOGY
in
ELECTRICAL ENGINEERING
(With Specialization in. Power System Engineering)

RAMESH PAL SINGH

6
(A r. Jtc OF TECH (/

DEPARTMENT OF ELECTRICAL ENGINEERING

INDIAN INSTITUTE OF TECHNOLOGY ROORKEE
ROORKEE - 247 667 (INDIA)
JUNE, 2008
 ,oF7F~kN0

L J
T.ID.[?n"T.+sww.rw~w
Z°o8-3--- 3- S
/

INDIAN INSTITUTE OF TECHNOLOGY ROORKEE

ROORKEE - 247667

CANDIDATE'S DECLARATION

I hereby declare that the work presented in this

Dissertation entitled -Sensitivity Based Method for

Transmission Pricing Under Open Access" submitted
in partial fulfillment of the requirements for the award of the degree of
Master of Technology in Power System Engineering submitted in
the Department of Electrical Engineering, Indian Institute of
Technology Roorkee , Roorkee is an authentic record of my own
work carried out under the supervision of Dr. J. D. Sharma,
Professor , Department of Electrical Engineering, Indian Institute of
Technology Roorkee, Roorkee.
I have not submitted the matter embodied in the report for the
award of any other degree or diploma.

Date:
Place: Roorkee (Ramesh Pal Singh)

This is to certify that the above statement made by the

candidate is true to the best of my knowledge and belief.

D arma
Pro or
Department of Electrical Engineering
Indian Institute of Technology Roorkee
Roorkee - 247667,' India.

1
 ACKNOWLEDGEMENT

I generously thank Dr 3 D Sharma, Professor, Department of Electrical

Engineering, Indian Institute of Technology Roorkee, Roorkee for passing
on strong ethical values, valuable guidance, appreciation and motivation
throughout this work. The matter presented in this dissertation is the fruit
of a close collaboration with him, and would certainly not have been the
same without his invaluable contribution. Working under his guidance has
been a great learning for life.
I would like to extend my sincere thanks to all the faculty members of the
Power System Engineering group including my colleagues for their
encouraging and caring words, constructive criticism and suggestions which
have contributed directly or indirectly in a significant way towards
completion of this work.
I am also thankful to Mr Kanwardeep Singh, Research scholar, Department
of Electrical Engineering, Indian Institute of Technology Roorkee, Roorkee
for invaluable suggestions and constant encouragement.
These last two years, I have lived a new life with my new found friends,
Research scholars Mr S K Tomar, Mr R D Patidar and Mr Rajeev Singh. I am
grateful to them all, for being excellent peers and creating a congenial
environment for work.
I would like to thank my wife Mrs. Richa Singh and my son Master
Pradyumn for putting up with me through out this ordeal with optimism and
smile. I am grateful to my parents, brother-in-law Dr K G Singh and sister-
in-law Miss Geetanjali for their constant support and well wishes.
Finally, I would like to express my deepest gratitude to God for his
blessings.

RAMESH PAL SINGH

2
 ABSTRACT

In this dissertation work sensitivity based approach is demonstrated

for transmission cost allocation under open access environment. The
power flow sensitivities used for this purpose are derived from full AC
Newton-Raphson power flow. It has been found in literature that the
individual participant's impact on the transmission power flow is
determined by the power flow sensitivities from a set of decoupled or
DC power flow equations. However, due to nonlinear characteristics of
electrical systems, DC power flow based approach provides only a
rough estimated solution.
The present work intends to calculate more accurate individual impact
signals for transmission cost allocation and compared with MW-mile
method derived from repeated application of AC load flow solution.
To demonstrate the efficient performance, the method has been tested
with IEEE 9- bus and IEEE30- bus test system and the obtained results
have been compared with the conventional MW-mile method.

3
 NOMENCLATURE

Abbreviation Description
OPF Optimal Power Flow
T&D Transmission & Distribution
LRIC Long Run incremental Cost
TSO Transmission System Operator
SRMC Short Run Marginal Cost
MW Megawatt
ICRP Investment cost related pricing
AFCR Annual Fixed Charge Rate
DC Direct Current
AC Alternating Current
GSDF Generalized Shift Distribution Factor
GGDF Generalized Generation Distribution Factor
GLDF Generalized Load Distribution Factor
RPAF Reactive Power Adjustment Factor
LUF Line Utilization Factor
PFD Power Flow Decomposition
MVAR Megavolt Ampere Ratio
 CONTENTS

Page no
Chapter - 1 Introduction 7
1.1 Background 7

1.2 Transmission open access 7

1.2.1 Transmission transaction cost 9
1.3 Contribution of the thesis 10

1.4 Outline line of the thesis 10

Chapter - 2 Literature overview 11

Chapter - 3 Transmission pricing methods 15

3.1 Introduction 15

3.2 Transmission pricing methods 16

3.2.1 •Postage stamp 16
3.2.2 Contract path 16
3.2.3 Distance based MW-mile 16
3.2.4 Power flows based MW-mile 16
3.2.5 Short run marginal cost (SRMC) pricing 17

3.2.6 Long run marginal cost (LRMC) pricing 18

3.3 Transmission usage evaluation 18

3.3.1 Distribution factors 18

3.3.2 AC Flow sensitivity indices 19

3.3.3 Full AC power flow solutions 19

3.3.4 Power flow decomposition 21

3.3.5 Tracing algorithms 21

3.3.5.1 Bialek tracing algorithm 22
3.3.5.2 Kirschen tracing algorithm 22
3.3.6 Alternating pricing strategies 22

3.3.6.1 Unused transmission capacity 23

3.3.6.2 MVA-mile methodology 24
3.3.6.3 Pricing of counter flows 24
3.4 Zbus Network cost allocation methodology 25

E
 3.4.1 Transmission cost allocation 25
Chapter — 4 Sensitivity based transmission cost allocation method 28
4.1 Algorithm description 31
Chapter — 5 Case study and results 34
5.1 Case study 1: IEEE 9-bus system 34
5.2 Case study 2: IEEE-30 bus system 40
Chapter —6 Conclusions 49
References 50
Appendix —A 52
Appendix —B 53

0
 CHAPTER 1

INTRODUCTION

1.1 Background
Transmission pricing evaluation is a complex task and becomes more
important after introducing the competition into the electricity supply industry.
Thus many methodologies have been proposed in recent years such as the postage
stamp methodology, the contract path methodology, the distance based MW-mile
methodology, and the power flow based MW-mile methodology. However,
because of the averaging approach adopted in most of the aforementioned
methods, they are not efficient to reflect the true signals. Thus other more
complicated methodologies have also been proposed, including pricing, based
incremental/marginal methods, tracing power flow and so on. But those methods
still have some weak features and limits. Even though there are attempts to solve
this problem by using the OPF model, it is difficult to work in practice. In
addition, because of the complexity of power flows, the power injected or
extracted from any bus in the system would affect other lines in the network
without using or flowing through those paths. In this aspect, the sensitivity
method can produce the good signal to reflect such a signal.
1.2 Transmission Open Access
Deregulation of electric utilities is moving forward at a rapid rate in many
countries. The separation of the cost of building and operating a transmission
system from the generation of electric power is a far different way of looking at
an electric power system than now done in most countries where the generation
and transmission are treated as a single entity. Transmission open access is not an
end; rather it is a critical means for achieving the objective of a competitive
market place. In this context transmission open access will be the vehicle for fast
and fundamental changes in the electric utility industry. Transmission open access
opens a long list of issues related to management and operation of the
transmission system, and on pricing transmission and ancillary services. To
achieve the possible benefits of transmission open access, it has to be

7
accompanied by responsible power system operations in order to preserve system
reliability and achieve the desired economies.
Competitive market in generation and supply needs that transmission
networks should not place any undue constraints on the operation of generators
and their customers. There are two major obstacles for transmitting power to end
user. First, it is clear that if people will start to buy power from many different
suppliers, there would be more transactions; more contracts on track etc. and
infrastructure needed to carry out these transactions would become • more
complicated. Secondly, power delivery will become a problem. How could a
customer who had bought power from a competing supplier instead of his local
power company, get that power to his site? The local power company, which is
the owner of the transmission and distribution facility, is under no obligation to let
any one to use it especially to its competitors.
This leads to the unbundling of transmission services in such a way that
T&D systems are for the use of anyone transacting electric sales with the local
electric consumers. The term `Transmission Open Access' is commonly used
which refers to the requirement that the transmission network owners make their
systems available to other companies in the system. That may include
independent power producers, customers, or other utilities, that may desire to use
the network for power transactions i.e. under open access, all qualified parties, not
just the delivery system owner, have comparable rights to use the power system to
move power from one location to another.
It is clear that wheeling of electrical energy (transaction of power from
one point to other point using the facilities of one utility for other buyers and
sellers) is one of the more prevalent unbundled services. Hence pricing of
transmission services plays an important role in determining whether providing
transmission services is economically beneficial to both the wheeling utility and
wheeling customer.
1.2.1 Transmission Transaction Cost
New transmission technologies offer some benefits in addressing project
approval, but do not change cost-allocation and cost-recovery issues.
Transmission transaction cost depend upon its type i.e. firm transaction, non-firm
transaction which further categorized as long term, short term, available and
curtailable transactions respectively. Transmission transaction cost is that which is
incurred in order to fulfill the transmission contracts satisfactorily and consists of
several components. The major components of the "cost of transmission
transactions" are:
• Existing system cost: capital cost and fixed cost of existing facilities.
• Operating cost: due to generator re-dispatch and rescheduling from the
transmission transaction.
• Opportunity cost: benefits that utility forgoes due to operating constraints (the
cheaper generators could not be used).
• Reinforcement cost: capital cost of new facilities, which is only charged to
firm transactions.
Transmission pricing' allocation should have following goals:
• Recover Cost: Fees for transmission use must produce to cover all expenses of
investment, operation and maintenance, as well as provide a small level of
profit for the owners.
• Encourage efficient use: Price structure should give incentives for efficient
use of the transmission system.
• Encourage efficient use: Price structure should provide incentive for
investment in new facilities when and where they are needed.
• Fair: Pricing system must be fair or equitable to all users. This means it must
not unduly favor certain classes of customer or certain types of usage.
• Understandable: Pricing system must be understandable and simple so that its
user can make good buying decision.
• Workable: A pricing system must not be complicated so that it cannot be
implemented economically.
There are many different opinions on how transmission pricing should be done
and about the only thing generally agreed is that the charges of transmission
system should cover all the costs and provide a small level of profit for the
owners of the transmission facilities.
1.3 Contribution of the Thesis
In this dissertation thesis sensitivity based method is presented to calculate
more accurate individual impact signals for transmission cost allocation. This is
based on the power flow sensitivities derived from a set of full AC Newton
Raphson power flow equations. The power flow change and transmission cost are
calculated from the sensitivities.
1.4 Outline of the Thesis
Chapter 2 presents the literature review.
Chapter 3 describes the different transmission cost allocation methods.
Chapter 4 describes the sensitivity based transmission cost allocation method and the
corresponding algorithm.
Chapter 5 presents the Case study and results for IEEE 9-bus and IEEE-30 bus
system.
Chapter 6 summarizes the conclusions of the dissertation work.

10
 CHAPTER 2

LITERATURE REVIEW

Perera et al [1] described a methodology for evaluating an optimal set of

transmission prices, to be charged for use of transmission system on a time of
usage basis. An important consideration of revenue reconciliation of the
transmission utility is developed. Optimal pricing problem is formed with
objective function for consumer benefit which include generation cost function
and generation cost with un-served demand in the absence of transmission system.
Constraints included nodal power balance equations, nodal power injection limits,
branch flow limits.
Shrimohammadi et al [2], identified various components of transmission cost,
based on the category of transmission transaction. Evaluation of these cost
components like operating cost, opportunity cost, reinforcement cost and existing
system cost is given with suitable examples.
Shrimohammadi et al [3], distinguished difference between transmission price and
cost and illustrated how transmission costs are transferred to the transmission
prices. Various transmission pricing paradigms like rolled-on transmission
pricing, incremental transmission pricing and composite embedded/incremental
transmission pricing are introduced.
Sood et al [4], presents a new method for allocating embedded cost of
transmission to its users, through power pool and transactions under deregulated
environment of power system. The proposed method allocates the embedded cost
of transmission facilities among its users in a non-discriminatory manner and
provides the correct economical signals in a simplest possible way. Many
problems of the existing methods have been eliminated in the new proposed
method. The effect of reactive power flow caused by a transaction has also been
taken into consideration, while allocating embedded cost.

11
 Happ [5], presented number of embedded as well as long run incremental
methods of determining the costs of firm wheeling and methodologies that
allocate the wheeling cost in the case of multiple wheeling. Four embedded cost
of wheeling methodologies; rolled-in-embedded method, contract path method,
boundary flow methods and line by line methods; are summarized and algorithms
for calculation of the same are presented. Similarly four separate cost of wheeling
allocation methods for long-run incremental cost (LRIC); dollar per MW
allocation, dollar per MW-Mile allocation, interface flow allocation by regions
and one-by-one allocation; are presented along with their calculation algorithms.
Kovacs and Leverlett [6] presented a load flow based method for allocation of the
long-run cost of transmission capacity. First direct capacity cost for a given
transaction on each facility is estimated with help of usage faculty and cost of that
usage facility. Then based on this estimation; evaluation for embedded cost,
incremental cost and marginal cost are given. Common features of all these three
types of cost based on usage method are discussed. Other load flow methods like
boundary flow method and generalized flow-mile methods are also described for
evaluation of transmission cost.
Jing and Duan [7], described methods of transmission fixed cost allocations by
including several different aspects including: costs to be allocated, entities to pay
the costs, system states to be based on, cost allocations of unused capacities,
pricing of counter flow and that of reactive power, and • allocation principles and
methods. In addition, the characteristics of each method are analyzed and
compared with those of the others.
Pan et al [8] presented an overview of usage based methods of transmission cost
allocation under open access. The design of usage based cost allocation methods
involves two major issues: accurate and efficient algorithms for transmission
usage evaluation and fair and equitable pricing rules.
A transmission cost allocation method is presented in [9], based on cooperative
game theory and transmission network capacity use by consumer agents. ,

12
Rudnick et al [ 10] suggested that the application of marginal costing to
transmission pricing in open access schemes requires the collection of a
supplement to finance the transmission systems.
Bialek [11] the MW-mile methodology to allocate the transmission
supplementary charge to real and reactive power. loads. The charge for usage of an
individual transmission asset is split into a non-locational component, due to the
unused capacity of the asset and a locational component due the actually used
capacity of the asset.
Lima [12] has suggested a set of other methods derived from the MW-mile rule to
allocate transmission fixed costs as the application of marginal cost in pricing the
transmission services is not effective mainly due to revenue reconciliation. To
overcome this, different methods derived from the MW-mile rule like Modulus
method, Zero counter flow method, Dominant flow method are suggested to
allocate transmission fixed costs.
Wu et al [13] suggested a method based on sensitivity, analysis needs a smaller
computation time. The method does not need to solve the incremented OPF
solutions; which allows it use in large- scale systems.
Javicr et al [ 14] have suggested that a marginal network pricing is not able to
generate enough revenues to recover the cost of the primary transmission service.
This cost recovery problem requires the stipulation of a "complementary charge"
which completes the network marginal revenues. This paper evaluates-
numerically ' and qualitatively-three different allocation methods of the
complementary charge: Marginal Participation Factors, Mean Participation
Factors, and Benefit Factors.
Conejo et al [15] has suggested a new procedure for allocating transmission losses
to generators and loads and is based on the network-bus matrix, one advantage of
this method is that it exploits the full set of network equations and does not
require any simplifying assumptions. The method is based on a solved load flow
and is easily'understood and implemented.

13
Conejo et al [16] suggested the problem of allocating the cost of the transmission
network to generators and demands. A physically-based network usage procedure
is proposed. This procedure exhibits desirable apportioning properties and is easy
to implement and understand.
Phichaisawat and Song [17] suggested a sensitivity based method for the
complexity of power flows, the power injected or attracted from any bus in the
system would affect other lines in the network without using or flowing through
those paths. Based on Investment Cost Related Pricing (ICRP) approach based the
Jacobian matrix obtained from the Newton-Raphson power flows to calculate the
transmission prices are used.
Conejo et al [18] provides expressions to compute the sensitivities of locational
marginal prices with respect to power demands within an optimal power flow
market clearing framework. Sensitivities with respect to other parameters can also
be obtained.
Chaitusaney and Arporn [19] has suggested a method for allocating transmission
costs to all participants' based on the ratio of incremental power flow caused by
each participant and the transmission line capacity. This method employs full AC
power flow sensitivity analysis, which provides more accurate results than
derived DC or decoupled power flow.

I61
 CHAPTER 3
TRANSMISSION PRICING METHODS

3.1 Introduction:

The restructuring of the power industry is based on the separation of

electricity generation, transmission, distribution and retailing. Electricity
transmission and distribution are considered natural monopolies, whereas
generation and retailing are open to competition. Open access to the transmission.
system and fair, cost reflective pricing of transmission services are very important
for healthy competition in the power sector. To ensure fair and non-discriminatory
transmission access and pricing, most new electricity markets have introduced an
independent transmission system operator (TSO), who is responsible for the
operation and pricing of the transmission system. Owing to the economies of
scale in electricity transmission it is problematic to price transmission services
solely on the basis of short run marginal costs (SRMC) since collected revenues
cannot cover the revenue requirements of transmission owners. The charges for
transmission, services introduced in countries that have restructured their power
sectors are usually separated into three components.
(i) Connection cost: This cost covers the cost of network reinforcements
required to provide service to a transmission customer. It is characterized
as depending on how far from the customer site the customer's liability
extends.
(ii) Transmission use-of-system cost: This cost compensates the transmission
owner for the sunk costs of the existing transmission system assets, as well
as the transmission system operating and maintenance costs.
(iii) Transmission operating cost: This cost covers the costs incurred in the
electricity market due to the existence of a non-perfect transmission
system. These are the costs of transmission losses and transmission
limitations. The revenues collected from energy charges are used to

15
 compensate the providers of the corresponding services (generation
adjustment to cover losses, generation or demand adjustment to relieve
congestion).
3.2 Transmission Pricing Methods [1-11, 14, 18]

Transmission plays a crucial role in the deregulated power systems. It

concerns with all sections in the electricity market. There are many ways to
categorize the transmission cost methodologies. The transmission cost
Methodologies are categorized below:
3.2.1 Postage Stamp:

This method applies the magnitude of the transacted power with transmission
charge. The Simplicity, is the advantage of this method. However it cannot
provide the economic incentive because it ignores the actual System operation
and the capacity use of the network. This method is not fair for the customers who
use the short distance to take the power.
3.2.2 Contract Path:

This method employs a specific path, contract path, to carry the wheeling
transaction mostly without any power flow study. Thus because of the nature of
the power flows, of electricity different from other commodities, the parallel flow
problem may take place.
3.2.3 Distance Based MW-mile:

The magnitude of the transacted power and the airline distance between a
generator and a customer are calculated in this method. The disadvantage is that
generally the airline distance is different from the network use.
3.2.4 Power Flows Based MW-mile:

This method is based on the extent of use of the power flow in the
configuration. The cost .per MW per unit length of the transmission lines is taken
into account. In this MW-Mile methodology, DC power flow formulation is used
to estimate the usage of firm transmission services by wheeling transactions, and
the procedure for multitransaction assessment may be outlined as follows.

16
Step 1) For a transaction , the transaction-related flows on all network lines, are
first calculated using DC power flow model considering the nodal power
injections only involved in that transaction.
Step 2) The magnitude of MW flow on every line is multiplied by its length (in
miles) and the cost per MW per unit length of the line (in $/MW-Mile), and

_1
summed over all the network lines as
MWMILE CiLkMW , k (3.1)
kEK

The above process is repeated for each transaction t e T , including one the
utility's native generations and loads. Finally, the responsibility of transaction to
the total transmission capacity cost is determined by

TC, = Total Cost MWMILEt

MWMILEt E
!ET
(3.2)

MW-Mile methodology ensures the full recovery of fixed transmission costs and
also reflects the actual usage of transmission systems.
3.2.5 Short Run Marginal Cost (SRMC) Pricing

The SRMC spot pricing approach refers to operating cost and opportunity
cost. Other costs such as reinforcement costs, capital costs of new transmission
facilities needed to accommodate the transmission transaction, are not included.
The well-known spot pricing approach for electricity market based on the
Langrangian theory to derive nodal energy cost from the DC load flow
approximation to the equations describing the optimal dispatch of power systems.
These nodal prices reflect the marginal impact which varies following the net
injections of power at each bus on the total cost of operating the system. Network
capacity is fixed and the user is charged on the basis of the incremental cost of
transmission losses, transmission congestion. The economic theory denotes that
goods and services should be charged on the marginal cost basis.

17
 3.2.6 Long Run Marginal Cost (LRMC) Pricing

This approach refers to operating cost, opportunity cost, and includes

reinforcement costs, due to transmission expansion. In the LRMC pricing the
network can be expanded to meet incremental use. The user is charged on the
basis of the incremental investment and operating costs caused by their
incremental use of the transmission network.
3.3 Transmission Usage Evaluation [8-131

Accurate knowledge of transmission usage is essentially important in the

implementation of usage-based cost allocation methods. Due to the nonlinear
nature of power flow equations it is theoretically very difficult to decompose the
network flows into components associated with individual customers. On the
other hand from an engineering point of view it is possible and acceptable to
apply approximate models or sensitivity indices to estimate the contributions to
the network flows from individual users.
3.3.1 Distribution Factors

Distribution factors based on DC power flows can be used as an efficient tool

for evaluating transmission capacity use under various open access structures.
These distribution factors Generation Shift Distribution Factors (GSDFs) and
Generalized Generation/Load Distribution Factors (GGDFs/GLDFs) have been
used extensively in the domain of power system security analysis to approximate
the relationships between transmission line flows and the generation/load values.
The application of distribution factors for assigning transmission payments may
offer transmission providers three alternatives to allocate the total fixed
transmission costs among different users, i.e., based on transaction-related net
power injections, only to generators, and only to loads.
GSDFs were used in conjunction with linear programming to identify the
maximum transaction-related flows for cases in which transactions were specified
by bounded generation and load injections. GGDFs were applied directly to
estimate the contribution by each generator to the line flow on the transmission
grid while GLDFs were used to allocate the sub-transmission network charges
over the loads within a distribution company.
3.3.2 AC Flow Sensitivity Indices

The sensitivity of transmission line flows to the bus power injections can
also be derived from AC power flow models the contributions of each generation
bus to all transmission line MW flows were directly estimated via a set of
coefficients named Line Utilization Factors (LUFs) as shown below.
OPi, j = u OPo + u2 LPG 2 + ........ +un ~OPG,, + u'APc n (3.3)
The numerical values of LUFs can be calculated using standard AC power flow
Jacobian with some minor simplifications. The concept of Reactive Power
Adjustment Factor (RPAF) was introduced as a measure of the impact of unit
MVA Load change or a transaction on the total generation reactive Power output.
The formulation of RPAF is shown below involving only the sensitivity indices of
network reactive power Losses to the active and reactive injections together with
appropriate Scaling factors.

RPAF = Aq, + a SQ111.,., ErAq +R SQ,o.,., Q Apr (3.4)

Where Q,n S S. is the transmission are network reactive losses, Op; and Aq, are

the unit active and reactive load at bus i . Scaling factors a and 13 are used to
reconcile the difference between the total system reactive power losses and the
total incremental reactive power losses while scaling factors E, and Q; are used to

ensure that the load increments Op; and Aq; are consistent with specified power
factor at the given bus.
3.3.3 Full AC Power Flow Solutions

More precise cost information is often needed in the assessment of

wheeling transactions requiring full AC power flow solutions or OPF studies.. In a
single-transaction case, the "differencing approach" can be used which only
involves two AC power flow or OPF studies, one without the transaction and one
with the transaction. However, the problem becomes a greater challenge in a

19
multi-transaction case because of the nonlinear nature of power flow models and
also the interactions among different transactions. A power flow based multi-
transaction assessment methodology was introduced in, which involves the
following three main study steps:
Step (1): Perform two power flow simulations, one for the base case (no
transactions) and one for the operating case (including all the transactions) to
determine the combined impacts caused by the transactions on the System. These
impacts may include MW/MVAR line flows, reactive power output of generators
and real power losses replacement from the slack bus.
Step (2): For each transaction t = 1, • • ••, T, investigate two power flow cases: in
one case only transaction t is included and in the other case all transactions
except for t are included.
Step (3): The problems of then solved to distribute the MW/MVAR line flows,
reactive power output of generators, and real power losses to each transaction.
The formulation below shows an example on how the reactive power support
from generator, i.e., can be distributed to each transaction by minimizing the sum
of squared difference between the actual allocation and the marginal and
incremental values.
Mint' [(AQ,— \Q ) 2 + (AQ', — OQ1) 2 ]
(ET
(3.5)
s.t.Y AQ,,, = AQ ;
(ET

Where A Q . ! , A Q ; M , A Q ~ 1 , are the actual allocated, marginal and

incremental reactive power supports for transaction t respectively. This method is
suitable for an open market model consisting of one or more pools, and the study
objective is to determine the impact of a transaction on the base operating
condition.

20
 3.3.4 Power Flow Decomposition

Power Flow Decomposition (PFD) algorithm is a network solution for

allocating transmission_ services among individual economical transactions on the
system. It can determine, for each transaction the following:
i) The usage of transmission network (both real and reactive flow
components),
ii) The net power imbalance and
iii) The contributions from participating generators to real-power-loss
compensation.
The algorithm is initially designed for the application in a bilateral contract based
market model but can also be used for wheeling transaction assessment. The PFD
algorithm is based on superposition of all transactions on the system and
decomposes the network flows into components associated with individual
transactions plus one interaction component to account for the nonlinear nature of
power flow models. Assuming there are totally transactions on the system, the AC
power flow solutions can then be decomposed into:
SN = S, + S,n, (3.6)
(ET

SM N = Y, iJ M r+ SM Int
tE T

Where
SN is the vector of total complex power injected into the system,
S is the vector of complex power injected into the system in response to the
transaction , and
St is the vector of complex power caused by the interaction among transactions.
3.3.5 Tracing Algorithms

Two tracing algorithms i.e. the Bialek and the Kirschen are designed for
the recovery of fixed transmission cost in a pool based market. The basic
assumption used by tracing algorithms is the proportional sharing principle. In
Bialek tracing algorithm it is assumed that the nodal inflows are shared
proportionally among the nodal outflows.

21
3.3.5.1 Bialek Tracing Algorithm:

Bialek tracing algorithm has two versions: upstream-looking algorithm

and downstream-looking algorithm. The upstream-looking algorithm will allocate
the transmission usage/supplement charge to individual generators and apportion
the losses to the loads, and conversely, the downstream-looking algorithm will
allocate the transmission usage/supplement charge to individual loads and
apportion the losses to the generators. The algorithm is constructed on a matrix
formulation and therefore enables the use of linear algebra tools to investigate
numerical properties of the algorithm. The algorithm can also provide solutions to
the questions as how much of the power output from a particular generator/station
goes to a particular load or how much of the demand of a particular load comes
from a particular generator/station. In addition, the topological distribution factors
are always positive, thus eliminating many problems resulting from counter flows.
3.3.5.2 Kirschen Tracing Algorithm:

The Kirschen algorithm also has two versions designed for identifying the
contributions from either the individual generators or loads to the line flows. In
general, this algorithm shares many useful functions and attractive features with
the Bialek tracing algorithm. The state of system can then be represented by a
directed graph consisting of commons and links with the direction of flow
between commons and the data about generations/loads in commons and flows on
the links.
Kirschen tracing algorithm is able to work well under various system-loading
conditions because no additional assumptions are used in the problem
formulation. On the other hand, it is a simplified approach since the contributions
from the generators (or loads) to a particular common will be proportionally
assigned to the loads (or generators) and line flows within that Common.
3.3.6 Alternative Pricing Strategies

This section considers alternative transmission pricing strategies under open

access. In particular, we will discuss three key Issues in implementing usage-

22
based cost allocation. These include Unused transmission capacity, MVA-Mile.
methodology, and pricing of counter flows.
3.3.6.1 Unused Transmission Capacity

Unused or unscheduled transmission capacity is defined as the difference of

facility capacity and the actual flow on that facility. In the original MW-Mile
methodology, the usage of transmission facilities is measured by absolute flow
values, and the transmission facility costs are allocated in proportion to the ratio
of flow magnitude contributed by a particular transaction and the sum of absolute
flows caused by all transmission users. The following equation may give a more
general expression of MW-Mile rule.

T C r = Y C K -~-
r
(3.7)
1ET
k E K

Where
TC1 is the cost allocated to transaction ,
G is the embedded cost of facility ;
F. k is the magnitude of flow on facility caused by transaction;
K and T represent the sets of transmission facilities and transactions on the
system.
The above pricing rule ensures the full recovery of all the embedded costs and
assumes that all transmission users have to pay both for the actual capacity use
and for the unused transmission capacity. There are a number of reasons for
alternative pricing rules on the allocation of unused transmission capacity. First,
this pricing rule does not encourage more efficient use of transmission systems
because no matter how the line capacity utilized the total costs will be recovered.
Second, the cost allocation procedure can seem to be unfair to some users when
they have to share the cost of an expensive transmission facility for which only a
small portion of the facility capacity has been utilized. On the other hand,
adequate transmission margin is required to maintain system reliability. One
possible solution is to revise the MW-Mile formulation by charging the
transmission users based on the percentage utilization of the facility capacity,

23
instead of the sum of flows contributed by all users. That is, transmission users
will be charged only for the actual capacity use but not for the unscheduled
Capacity. This revised formulation cannot get full recovery of the fixed
transmission costs since the total flows are usually smaller than the facility
capacities under normal system conditions. The total ignorance of the reliability
value of transmission margin under system contingency conditions is its main
drawback. The parameter can be used to determine the level of cost recovery for
the unused transmission capacity.
3.3.6.2 MVA-Mile Methodology
It has been recognized that the use of transmission resources is best measured
by monitoring both real power and reactive power given the line MVA loading
limits. Consequently, the basic concepts of MW-Mile methodology can be
extended to include the charging for reactive power flows resulting in the so-
called MVA-Mile methodology .Besides full AC power flow studies, the network
usage due to reactive power flows can be determined using sensitivity approaches,
decomposition formulations and tracing methods. For Instance the decomposition
formulation proposed in can decompose the network flows into components, both
real and reactive, associated with individual transactions. Electricity tracing
algorithms can also be used to the reactive power flows. With the Bialek tracing
algorithm, a fictitious node is added in the middle of each line to model the
different natures of line reactive power losses. The newly developed Kirschen
tracing algorithm uses real and imaginary currents to trace complex power flows
between generators and loads.
3.3.6.3 Pricing of Counter Flows

Counter flow is the flow component contributed by a particular transaction that

goes in the opposite direction of the net flow. In the original MW-Mile
formulation as well as some usage-based allocation pricing rules, the impact of
each transaction on the flows is measured by the magnitude so that all
transmission users are required to pay for the use of path-provision service,
irrespective of the flow directions. However, in view of the contributions of

24
 counter flows in relieving the congested transmission lines, any usage-based tariff
that charges for counter flows needs to be carefully reviewed. For this regard, the
zero counter-flow pricing method suggests that only those that use the
transmission facility in the same direction of the net flow should be charged in
proportion to their contributions to the total positive flow. On the other hand,
proposals of giving a negative charge or credit to the users producing counter
flows may not be easily accepted by the transmission service providers.
3.4 ZBUS Network Cost Allocation Methodology [15, 16]

The active power flow through any line can be split and associated to the nodal
currents in a direct way. Then, the active power flow through line jk associated
with nodal current is

p1 = .{Vja~ k l,* } (3.8)

Where

a ~k = ( Z ;; — Z k;) y j k + Z ;;y S k IL

Where Z,,i is the impedance of the line ji

Zid is the impedance line Id

I is the current at bus i

The voltage at node is given by

V; _ z;;I; (3.9)

3.4.1 Transmission Cost Allocation [16]

We define the usage of line due to nodal Current as the absolute value of the
active power flow component i.e.

U k = 1Pj'k (3.10)

25


That is, we consider that both flows and counter-flows do use the line. The total
usage of line jk is then
n
U;A = U j k (3.11)
i=]

Then, we proceed to allocate the use of transmission line jk to any generator and
demand. Without loss of generality, we consider at most a single generator and a
single demand at each node of the network. If bus contains only generation, the
usage allocated to generation pertaining to line jk is

U jk = U jk (3.12)

On the other hand, if bus i contains only demand, the usage allocated to demand
I pertaining to line jk is

U k = U1 (3.13)

Else, if bus Z contains both generation and demand, the usage allocated to the
generation at bus pertaining to line jk is
G; = PG, TT
jk (3.14)
. [ (P G I + P D i) ~ v jk

and the usage allocated to the demand at bus Z pertaining to line jk is

U Di _ P "` U
jk
(3.15 )
~k — (PGi + PD;)

For the sake of simplicity and for each line, we consider a total annualized
line cost in, which includes operation, maintenance, and building costs. The
corresponding cost rate for line jk is then

NJk = C jk / V jk (3.16)

In this way, the cost of line jk allocated to the generator located at bus i is

C kk' J
=rkUG; (3.17)

26
Similarly, the cost of line jk allocated to the demand located at bus i is

p=
C' rik
Di
Uk (3.18)

Finally, the total transmission cost of the network allocated to the generator
located at bus is

C k' _ rikU jk (3.19)

(i,k)E0r,

In addition, similarly, the total transmission cost allocated to the demand located
at bus is
C D' _ rJk U D' (3.20)
( j,k )EQL

This method is appropriate for the allocation of the cost of the transmission
network to generators and demands complement existing methods.

27
 CHAPTER 4
Sensitivity based transmission Cost Allocation method

This method determines the individual impact on the transmission system

by calculating the power flow sensitivities from the full AC Newton—Raphson
power flow. These power flow sensitivities give more accurate impacts on the
transmission flows. They can determine the impacts on the transmission flows
which are caused by reactive power transaction.
The full AC power flow sensitivities which are employed to calculate the
changes of power flows on transmission lines with respect to the changes of net
power injections at any buses can be derived. In fig 4.1 if we consider the
transmission line connecting bus j and k, the equations respected to the power
flowing on the transmission line are as follows:

Bus)

2
2

Fig 4.1: Transmission Model for calculating power flow sensitivities



S'k = { j12 (ljkl L - 0jk — ~i jI I V kI lykI L8j — Vk — ejk + J

l7c IVi1
2 ~/ 2
(4.1)
The real power
7T 2 ~'+
Pjk 1 j~ IYikJ Cos(Ojk) — Cos(1 j — (5k — 0 1k) (4.2)
I VY ) I l

Where S.;k : Apparent power on transmission line j - k ,

Pik.: Real power on transmission line j - k,

l Kil , JVkJ : Voltage magnitude of bus j and k respectively,

(5j , 8k : Voltage angle of bus j and k respectively,

rkI L O.;k : Reactance of transmission line, and

Bc : Susceptance of transmission line

From (4.2), we can calculate the power flow sensitivities with respect to the
changes of net power injections at any buses by using the theory of partial
differentiation and d chain rule as follows:

a P ;k N a P jk * a P jk * V Q i

+ aQ~ a8~
aP ;k = ' 0P,k ap + aP jk * aQ 1
7 (4.4)
a I m I 1- a P 1 a I Y m I a Q 1 a I ►" m I

Where, N : number of buses in the system,

P ; : Net real power injection at bus i ,
Qi : Net reactive power injection at bus i,

S ,,, : Voltage angle of bus m, and

V»=Voltage magnitude of bus m
We can express (4.3) and (4.4) by the use of jacobian matrix which can be obtain
from the normal power flow analysis. Therefore, we firstly assume that the power

29
 flow sensitivities with respect to the real and reactive power s of reference bus are
zero. So (4.3) and (4.4) can be written in the form of matrix form:

aP,, aP, 3Q
a U m a p t

aP,k - aP, aQ, (4.5)

aP;,,
a I Y m I a I Y m j a I Y m f OQi

OP; OP; OQ;

Since , are the elements in Newton- Raphson jacobian
MS , a V„ MS,,, al v.1
matrix, (4.5) can be rewritten as

O8, ,
OP;k
_ P P;
la
OP,k

(4.6)-
aP,k aPk T

a ~v,1I 3Q1

OP k ap.k
aP [ j T -1
_ a8m
aPk aP;k (4.7)

oIv
OP,k
Where . power flow sensitivity on transmission line j - k with respect to real
aP,
power change at bus i, and

apk
Power flow sensitivity on transmission line j - k with respect to reactive
aQ,
power change at bus i
Equation (4.7) can be accomplished by substituting the inverse of Newton-
Raphson jacobian matrix and the partial derives of P1 with respect to voltage
angle and voltage magnitude which are computed from the partial differentiation
of (4.2) as follows:

30
 0 form ~ j & k
aP~k—
a = V J V k IJYIk I sin(,5 — 8k — Bak ) for m=j

—IV J f V,, IIY;kIsin(8, —8k —Bak ) form=k

(4.8)

0 form~j&k
aP Ik
= 1 2IV i IVk IIY,kIcos(0 jk ) — IV,, IFY,kl sin(8 j — 8k — 01k ) for m=j
a I V" , I - Vt I y I COS(CS, — Csk — 0 /k ) for m=k
(4.9)

It is noticed that the jacobian matrix used in equation (4.6) is applied for the
system with a specified reference bus, i.e. the real and reactive powers of the
reference bus are not defined. Therefore the obtained power flow sensitivities for
the transmission line j - k will be zero for the element with respect to the net
injected power change at the reference bus it means that the reference bus does
not have any impacts on any transmission line flows.
4.1 Algorithm description:
The algorithm of the sensitivity based method shown in flow chart given in
Fig 4.2:
Step 1: Initialization
Define the power system base MVA, Power mismatch accuracy,
acceleration factor, and maximum number of iterations.
Step 2: Take system data which include electricity auctions, existing electricity
transactions and other system data such as system configuration, transmission
system parameters, transmission costs etc.
Step 3: After getting data, the program is used for power flow solution by the
Newton-Raphson method to find the operating point
Step 4: Calculate the power flow sensitivities.
Step 5: Take the input transaction data such as customer, supplier and amount of
transacted power.

31
Step 6: Calculate the power flow change, for power flow on transmission line
t caused by the consumed or injected power of transaction at bus i, i.e.

Power flow change= (3t, i x transacted power (4.10)

Where (3t, i is the power flow sensitivity for transmission line t with respect to
bus i

Step 7: Then calculate the transaction cost for each customer or supplier, i.e.

Ni
power flowchange
Transaction cos t = 'tc; * (4.11)
t= , ~transmissionlinecapacity)

Where tc, the cost of transmission is line t , and is the number of

transaction lines in the system.

Step 8: If there is no other transaction in the system then stops and prints
the values otherwise go to step 5.

Flow chart for the transmission pricing algorithm is shown below:

32
 START

INPUT: SYSTEM DATA AND

TRANSMISSION SYSTEM COST

RUN FULL AC NEWTON- REPHSON

POWER FLOW

COMPUTE POWER FLOW SENSITIVITIES

INPUT: TRANSACTION DATA (CUSTOMERS, SUPPLIERS,

AMOUNT OF TRANSACTED POWER)

COMPUTE THE CHANGES OF POWER FLOWS CAUSED BY

CUSTOMER AND SUPPLIER

1
Ni

TRANSACTION COST = tC " [POWER FLOW CAPACITY/TRANSMISSION LINE CAPACITYI

t=1

OTHER TRANSACTION

STOP

Fig 4.2: Flow chart for sensitivity based transmission cost allocation

33
 CHAPTER 5.
CASE STUDY AND RESULTS

In this chapter the case study and the results for the application of the sensitivity
based transmission cost allocation method to determine individual impact of
bilateral transactions on the transmission lines are presented. The proposed
approach has been applied to IEEE-9 bus and IEEE-30 bus test system. All the
costs of transmission lines are the annual fixed charge rate (AFCR) and ranged
from 1000 to 3000 $/year. The cost of transmission line is taken corresponding to
the length of transmission line.
First of all base case load flow solution is obtained for above mentioned systems.
Then for every transaction power flow sensitivities are calculated using equation
(4.7).Now the power flow change and the corresponding transaction costs can be
determined by using equation (4.10) and (4.11) respectively. Now the power flow
change and transmission costs are evaluated from MW-mile method by repeated
load flow solution.
Two case studies have been selected to demonstrate the efficiency of the
sensitivity based method. Here real power transactions are considered and the
results obtained from sensitivity based method are compared with the power flow
based MW-mile method.
5.1 Case Study 1: IEEE 9-Bus System
The following IEEE-9 bus system configuration comprises of 3 generators and 3
load buses. The following are the electricity transactions in the system.
PT1: Customer at bus 5 and supplier at 5, with transacted power of 5 MW
PT2: Customer at bus 5 and supplier at 3, with transacted power of 5 MW
PT3: Customer at bus 7 and supplier at 3, with transacted power of 5 MW
PT4: Supplier at 3, with transacted power of 5 MW
PT3: Customer at bus 7, with transacted power of 5 MW

34
 I

Fig 5.1: The IEEE 9-bus system configuration

Base load flow solution by Newton-Raphson method is shown below:

Base power flow (i.e. No transaction):

Power Flow by Newton-Raphson Method
Maximum Power Mismatch = 5.71436e-007
No. of Iterations = 4
Bus Voltage Angle ------Load---------Generation--- Injected
No. Mag. Degree MW Mvar MW Mvar Mvar

1 1.000 0.000 0.000 0.000 71.955 24.069 0.000

2 1.000 9.669 0.000 0.000 163.000 14.460 0.000
3 1.000 4.771 0.000 0.000 85.000 -3.649 0.000
4 0.987 -2.407 40.000 0.000 40.000 0.000 0.000
5 0.975 -4.017 90.000 30.000 0.000 0.000 0.000
6 1.003 1.926 0.000 0.000 0.000 0.000 0.000
7 0.986 0.622 100.000 35.000 0.000 0.000 0.000
8 0.996 3.799 0.000 0.000 0.000 0.000 0.000
9 0.958 -4.350 125.000 50.000 0.000 0.000 0.000

Total 355.000 115.000 359.955 34.880 0.000

35


Line Flow and Losses

--Line-- Power at bus & line flow --Line loss-- Transformer

from to MW Mvar MVA MW Mvar. tap

1 71.955 24.069 75.874

4 71.955 24.069 75.874 0.000 3.316

2 163.000 14.460 163.640

8 163.000 14.460 163.640 0.000 16.736

3 85.000 -3.649 85.078

6 85.000 -3.649 85.078 0.000 4.242

4 0.000 0.000 0.000

1 -71.955 -20.753, 74.888 0.000 3.316
5 30.728 -0.586 30.734 0.174 -14.274
9 41.226 21.339 46.422 0.266 -14.379

5 -90.000 -30.000 94.868

4 -30.555 -13.688 33.481 0.174 -14.274
6 -59.445 -16.312 61.643 1.449 -28.740

6 0.000 0.000 0.000

5 60.894 -12.427 62.149 1.449 -28.740
3 -85.000 7.891 85.365 0.000 4.242
7 24.106 4.537 24.529 0.095 -19.864

7 -100.000 -35.000 105.948

6 -24.011 -24.401 34.233 0.095 -19.864
8 -75.989 -10.599 76.725 0.506 -10.343

8 0.000 0.000 0.000

7 76.496 0.256 76,496 0.506 -10.343
2 -163.000 2.276 163.016 0.000 16.736
9 86.504 -2.532 86.541 2.465 -16.814

9 -125.000 -50.000 134.629

8 -84.040 -14.282 85.245 2.465 -16.814
4 -40.960 -35.718 54.346 0.266 -14.379

Total loss 4.955 -80.120

Similarly the power flow solution for the transaction TI, T2, T3, T4 and T5 can
be obtained by using Newton Raphson method. Now the power flow sensitivities are
obtained by using the matlab program and shown in table (5.1). Hence the power

36
 flow change and corresponding transaction costs can be calculated as shown in
the table (5.2) and (5.3) respectively. Now the power flow change and
corresponding transmission costs are evaluated from MW-mile method by
repeated load flow solution.

Table 5.1: AC Power flow sensitivities

Line No. power flow sensitivities
From To bust bus2 bus3 bus4 bus5 bus6 bus7 bus8 bus9
1 4 0 0 0 0 0 0 0 0 0
4 5 -0.9543 -0.3515 -0.3476 0 -0.3642 -1 0.6329 0.5983
0.36
5 6 -0.9633 -0.5948 -0.5883 1 0.3839 0.38 0 0.3868 0.3656
3 6 -1.0001 0.0001 0.0001 0 0.0001 0 0 0.0001 0.0002
6 7 -1.0115 -0.8787 0.1315 0 0.1381 0.14 0 0.1392 0.1317
7 8 -0.9634 -0.5953 -0.5887 0 0.3834 0.38 0 0.3863 0.3652
8 2 -0.9689 -0.4581 -0.4531 0 -0.4745 0.53 0 0.5359 0.5067
8 9 -0.9547 -0.3508 -0.347 0 -0.3635 0 0.6337 0.5991
0.36
9 4 -1.0107 -0.1232 -0.1218 0 -0.1275 0 -0.128 0.8792
0.13

Fable 5.2: Power flow change based on MW-method and sensitivity based method

Power Flow Change(MW-mile) Power Flow Change(Sensitivity Based)

no.
Ti T2 T3 T4 T5 Ti T2 T3 T4 T5
to
4 0 0.2498 0.026 -4.8 4.8293 0 0.2571 0.0284 -4.796 4.837
5 0 1.4254 -0.683 -2.97 2.2836 0 1.4316 -0.682 -2.961 2.2872
6 0 -3.592 -0.676 -2.94 2.2603 0 -3.586 -0.675 -2.933 2.2628
6 0 5 5 5 0 0 5 5 5 0
7 0 1.2286 4.291 1.919 2.3719 0 1.2286 4.2917 1.919 2.3722
8 0 1.2221 -0.734 1.908 -2.642 0 1.2219 -0.735 1.908 -2.642
2 0 0 0 0 0 0 0 0 0 0
9 0 1.2381 -0.744 1.933 -2.678 0 1.2377 -0.745 1.933 -2.679
4 0 1.1668 -0.703 1.824 -2.527 0 1.1659 -0.704 1.822 -2.53

37
 6

4
i--i--ii-i-i---ii-i-
ifii~iii~
---------u -
~iii~iiii
--------
iiii► '~~ifii~'i®fiifiii
-iffy---Ii—®fiiifiii
ifi~~'liiilCaiC'~~iiiifii • .
2 iii_ir_iiiii__ifi -
iii~fii►r~~i~ii®ii®®i -1AJI 11 '
-
fi
iiiilil~iil'lI~fElii!~fiii • i ,, i i
ii ~11~1Jaiitli~!1/i~~ •
fill IfiiiL Iii iii -1 IPALI
iiii~iitlliiiil ►/il ~i1IiliIIrlil• , - ri
iiiifif~Q~iiii~l/iii~1

-4
--iiiii-i-ifii-fi-i

-6
Transmission fine

Fig 5.2: Power Flow Change vs. Transmission Line (MW—mile Method)
6

i-iii-ice ------ii
4

MMMMM1w~~a7IrMM1 liS~~J.II•~~ - i
iil•17~~i1i►'►~~i®fi~ii■~
l~~i~ i~is>•k Ij~~ _
~i~iiiilTl•iiii~lllii\~i~ is

-4 ~~~~1~~~~~~~e~l•1•~~~~i
i~~IJI•~~~i~~i~l•1•~~~~
-------------------
--------------------
-6
Transmission line no.
Fig 5.3: Power Flow Change vs. Transmission Line no. (Sensitivity Based)

M
 250

200

150

0 +Transaction cost MW-mile method
—.--Transaction cost Sensitivity based rr
0

100

50

0
2 3 4 5 6
Teansaction no.
Fig 5.4: Transaction cost vs. Transaction no.

Table 5.3: Transmission Cost based on MW-method and sensitivity based method

S. Transaction Transaction Cost

No. No. MW-mile Method Sensitivity Based Method
1 Ti 0 0
2 T2 174.7341 174.7637
3 T3 150.6083 150.5752
4 T4 236.6639 236.8756
5 T5 234.0861 233.8976

39
5.2 Case study 2: IEE 30-bus System.

W Sci
SC2

Fig 5.5: IEEE-30 bus system

The electricity transactions in this system are same as in case study 1. Base load
flow solution by Newton-Raphson method is shown below:

Base power flow (i.e. No Transaction)

Power Flow Solution by Newton-Raphson Method
Maximum Power Mismatch = 7.54898e-007
No. of Iterations = 4
Bus Voltage Angle ------Load---------Generation--- Injected
No. Mag. Degree MW Mvar MW Mvar Mvar

1 1.060 0.000 0.000 0.000 260.998 -17.021 0.000

2 1.043 -5.497 21.700 12.700 40.000 48.822 0.000
3 1.022 -8.004 2.400 1.200 0.000 0.000 0.000
4 1.013 -9.661 7.600 1.600 0.000 0.000 0.000
5 1.010 =14.381 94.200 19.000 0.000 35.975 0.000
6 1.012 -11.398 0.000 .0.000 0.000 0.000 0.000
7 1.003 -13.150 22.800 10.900 0.000 0.000 0.000
8 1.010 -12.115 30.000 30.000 0.000 30.826 0.000
9 1.051 -14.434 0.000 0.000 0.000 0.000 0.000
10 1.044 -16.024 5.800 2.000 0.000 0.000 19.000
11 1.082 -14.434 0.000 0.000 0.000 16.119 0.000
12 1.057 -15.302 11.200 7.500 0.000 0.000 0.000
13 1.071 -15.302 0.000 0.000 0.000 10.423 0.000
14 1.042 -16.191 6.200 1.600 0.000 0.000 0.000
15 1.038 -16.278 8.200 2.500 0.000 0.000 0.000
16 1.045 -15.880 3.500 1.800 0.000 0.000 0.000
17 1.039 -16.188 9:000 5.800 0.000 0.000 0.000
18 1.028 -16.884 3.200 0.900 0.000 0.000 0.000
19 1.025 -17.052 9.500 3.400 0.000 0.000 0.000
20 1.029 -16.852 2.200 0.700 0.000 0.000 0.000
21 1.032 -16.468 17.500 11.200 0.000 0.000 0.000
22 1.033 -16.455 0.000 0.000 0.000 0.000 0.000
23 1.027 -16.662 3.200 1.600 0.000 0.000 0.000
24 1.022 -16.830 8.700 6.700 0.000 0.000 4.300
25 1.019 -16.424 0.000 0.000 0.000 0.000 0.000
26 1.001 -16.842 3.500 2.300 0.000 0.000 .0.000
27 1.026 -15.912 0.000 0.000 0.000 0.000 0.000
30 0.995 -18.015 10.600 1.900 0.000 0.000 0.000

Total 283.400 126.200 300.998 125.144 23.300

Line Flow and Losses

--Line-- Power at bus & line flow --Line loss-- Transformer

from to MW Mvar MVA MW Mvar tap

1 260.998 -17.021 261.553

41


2 17 7.77 8 -22.148 179.152 5.464 10.524

3 83.221 5.127 83.378 2.808 7.085

2 18.300 36.122 40.493

1 -172.314 32.671 175.384 5.464 10.524
4 45.712 2.705 45.792 1.106 -0.517
5 82.990 1.703 83.008 2.995 8.178
6 61.912 -0.958 61.920 2.048 2.264

3 -2.400 -1.200 2.683

1 -80.412 1.958 80.436 2.808 7.085
4 78.012 -3.158 78.076 0.771 1.344

4 -7.600 -1.600 7.767

2 -44.605 -3.222 44.722 1.1.06 -0.517
3 -77.242 4.503 77.373 0.771 1.344
6 70.126 -17.526 72.282 0.604 1.179
12 44.121 14.646 46.489 -0.000 4.685 0.932

5 -94.200 16.975 95.717

2 -79.995 6.475 80.257 2.995 8.178
7 -14.205 10.500 17.664 0.151 -1.687

6 0.000 0.000 0.000

2 -59.864 3.222 59.951 2.048 2.264
4-69.521 18.705 71.994 0.604 1.179
7 37.523 -1.885 37.570 0.367 -0.598
8 29.528 -3.754 29.766 0.103 -0.558
9 27.693 -7.322 28.644 0.000 1.594 0.978
10 15.823 0.653 15.836 0.000 1.278 0.969
28 18.819 -9.618 21.134 0.060 -13.086

7 -22.800 -10.900 25.272

5 14.356 -12.187 18.831 0.151 -1.687
6-37.156 1.287 37.178 0.367 -0.598

8 -30.000 0.826 30.011

6 -29.425 3.196 29.598 0.103 -0.558
28 -0.575 -2.370 2.438 0.000 -4.368

9 0.000 0.000 0.000

6 -27.693 8.916 29.093 0.000 1.594
11 0.000 -15.657 15.657 0.000 0.462
10 27.693 6.741 28.501 0.000 0.809

10 -5.800 17.000 17.962

6 -15.823 0.626 15.835 0.000 1.278
9 -27.693 -5.932 28.321 0.000 0.809
20 9.027 3.560 9.704 0.081 0.180
17 5.372 4.414 6.953 0.014 0.037
21 15.733 9.842 18.558 0.110 0.237

42
 22 7.583 4.490 8.813 0.052 0.107

11 0.000 16.119 16.119

9 -0.000 16.119 16.119 0.000 0.462

12 -11.200 -7.500 13.479

4 -44.121 -9.961 45.232 -0.000 4.685
13 0.000 -10.291 10.291 0.000 0.133
14 7.856 2.442 8.227 0.075 0.155
15 17.857 6.947 19.161 0.217 0.428
16 7.208 3.363 7.954 0.053 0.112

13 0.000 10.423
12 -0.000 10.424 10.424 0.000 0.133

14 -6.200 -1.600 6.403.

12 -7.782 -2.287 8.111 0.075 0.155
15 1.582 0.687 1.724 0.006 0.005

15 -8.200 -2.500 8.573

12-17.640 -6.519 18.806 0.217 0.428
14 -1.576 -0.681 1.717 0.006 0.005
18 6.014 1.744 6.262 0.039 0.080
23 5.001 2.956 5.810 0.031 0.063

16 -3.500 -1.800 3.936

12 -7.154 -3.251 7.858 0.053 0.112
17 3.654 1.451 3.932 0.012 0.027

17 -9.000 -5.800 10.707

16 -3.643 -1.424 3.911 0.012 0.027
10 -5.357 -4.376 6.918 0.014 0.037

18 -3.200 -0.900 3.324

15 -5.975 -1.665 6.203 0.039 0.080
19 2.775 0.765 2.879 0.005 0.010

19 -9.500 -3.400 10.090

18 -2.770 -0.755 2.871 0.005 0.010
20 -6.730 -2.645 7.231 0.017 0.034

20 -2.200 -0.700 2.309

19 6.747 2.679 7.259 0.017 0.034
10 -8.947 -3.379 9.564 0.081 0.180

21 -17.500-11.200 20.777
10-15.623 -9.606 18.340 0.110 0.237
22 -1.877 -1.594 2.462 0.001 0.001.

22 0.000 0.000 0.000

43
 10 -7.531 -4.384 8.714 0.052 0.107
21 1.877 1.596 2.464 0.001 0.001
24 5.654 2.788 6.304 0.043 0.067

23 -3.200 -1.600 3.578

15 -4.970 -2.893 5.751 0.031 0.063
24 1.770 1.293 2.192 0.006 0.012

24 -8.700 -2.400 9.025

22 -5.611 -2.721 6.236 0.043 0.067
23 -1.764 -1.280 2.180 0.006 0.012
25 -1.325 1.602 2.079 0.008 0.014

25 0.000 0.000 0.000

24 1.333 -1.588 2.073 0.008 0.014
26 3.545 2.366 4.262 0.045 0.066
27 -4.877 -0.778 4.939 0.026 0.049

26 -3.500 -2.300 4.188

25 -3.500 -2.300 4.188 0.045 0.066

27 0.000 0.000 0.000

25 4.903 0.827 4.972 0.026 0.049
28 -18.184 -4.157 18.653 0.000 1.309
29 6.189 1.668 6.410 0.086 0.162
30 7.091 1.661 7.283 0.161 0.304

28 0.000 0.000 0.000

27 18.184 5.466 18.987 0.000 1.309 0.968
8 0.575 -1.999 2.080 0.000 -4.368
6 -18.759 -3.467 19.077 0.060 -13.086

29 -2.400 -0.900 2.563

27 -6.104 -1.506 6.286 0.086 0.162
30 3.704 0.606 3.753 0.033 0.063

30 -10.600 -1.900 10.769

27 -6.930 -1.358 7.062 0.161 0.304
29 -3.670 -0.542 3.710 0.033 0.063

Total loss 17.599 22.244

Similarly, the power flow solution for the transaction Ti, T2, T3, T4 and T5 can
be obtained by using Newton Raphson method. Now the power flow change and

corresponding transaction costs can be calculated by using power flow

sensitivities obtained with the help of the matlab program. Now the power flow
change and corresponding transmission costs are evaluated from MW-mile
method.
 Table 5.4: Power flow change based on MW-mile method
and sensitivity based method

Line No. power flow change (MW-mile method) power flow change(sensitivity based method)
,.No. From To Ti T2 T3 T4 T5 TI T2 T3 T4 T5
1 1 2 0 1.5769 1.2573 -2.8197 4.077 0 1.5872 1.2651 -2.8141 4.0876
2 1 3 0 -1.1648 -0.8967 -2.5632 1.6664 0 -1.2042 -0.9276 -2.6127 1.6868
3 2 4 0 -0.8758 -0.4492 -1.1829 0.7337 0 -0.9224 -0.4679 -1.2485 0.7817
4 3 4 0 3.4048 3.6674 2.0634 1.6039 0 3.8795 4.137 2.5646 1.5703
5 2 5 0 2.6698 1.3098 -0.437 1.7468 0 2.6746 1.3129 -0.4363 1.7504
6 2 6 0 -0.253 0.3226 -0.9288 1.2514 0 -0.2666 0.3392 -0.9515 1.2921
7 4 6 0 2.5512 3.1851 1.01 2.1751 0 2.7304 3.3645 1.2434 2.12
8 5 7 0 -2.7504 0.7157 -0.6663 1.382 0 -2.5245 1.2159 -0.4044 1.6208
9 6 7 0 2.3331 3.3895 0.0651 3.3244 0 2.6253 3.8611 0.4185 3.442
10 6 8 0 -0.3128 -0.0165 -0.4377 0.4213 0 -0.0079 -0.0069 -0.005 -0.0017
11 6 9 0 -0.1004 -0.1198 -0.0464 -0.0735 0 -0.0986 -0.1219 -0.043 -0.0789
12 6 10 0 -0.057 -0.0801 -0.027 -0.0531 0 -0.0555 -0.0694 -0.0237 -0.0457
13 9 11 0 0 0 0 0 0 0 0 0 0
14 9 10 0 -0.0981 -0.1485 -0.0422 -0.1064 0 -0.1008 -0.1246 -0.044 -0.0807
15 4 12 0 0.161 0.2137 0.0544 0.1593 0 0.1793 0.2262 0.0765 0.1497
16 12 13 0 0 0 0 0 0 0 0 0 0
17 12 14 0 0.0041 -0.0012 -0.0008 -0.0004 0 0.02 0.0258 0.0087 0.0171
18 12 15 0 0.0499 0.0494 0.0159 0.0335 0 0.0824 0.1043 0.0351 0.0692
19 12 16 0 0.0697 0.0785 0.0264 0.0521 0 0.0899 0.1126 0.0383 0.0743
20 14 15 0 0.0197 0.0253 0.0085 0.0168 0 0.0197 0.0254 0.0085 0.0168
21 16 17 0 0.0888 0.1112 0.0379 0.0733 0 0.0889 0.1113 0.0379 0.0734
22 15 18 0 0.0484 0.0608 0.0208 0.04 0 0.0484 0.0608 0.0208 0.04
23 18 19 0 0.0478 0.0601 0.0206 0.0395 0 0.0479 0.0601 0.0206 0.0396
24 19 20 0 0.0477 0.0599 0.0205 0.0394 0 0.0477 0.0599 0.0205 0.0394
25 10 20 0 -0.042 -0.2283 -0.0232 -0.2052 0 -0.0486 -0.0611 -0.0209 -0.0401
26 10 17 0 -0.0746 -0.4698 -0.0426 -0.4272 0 -0.0886 -0.111 -0.0378 -0.0732
27 10 21 0 0.0057 -0.4848 -0.0122 -0.4726 0 -0.0126 -0.0147 -0.0059 -0.0088
28 10 22 0 0.0011 -0.2505 -0.0071 -0.2435 0 -0.0082 -0.0096 -0.0039 -0.0057
29 21 22 0 -0.0125 -0.0145 -0.0058 -0.0087 0 -0.0125 -0.0145 -0.0058 -0.0087
30 15 23 0 0.052 0.0665 0.0221 0.0444 0 0.0521 0.0666 0.0221 0.0444
31 22 24 0 -0.0206 -0.024 -0.0096 -0.0144 0 -0.0206 -0.024 -0.0096 -0.0144
32 23 24 0 0.0516 0.066 0.022 0.044 0 0.0517 0.066 0.022 _ 0.0441
33 24 25 0 0.0311 0.0419 0.0124 0.0295 0 0.0312 0.042 0.0124 0.0296
34 25 26 0 0 0 0 0 0 0 0 0 0
35 25 27 0 0.0313 0,0422 0.0125 0.0297 0 0.0314 0.0423 0.0125 0.0297
36 28 27 0 -0.0307 -0.0412 -0.0123 -0.0288 0 -0.0307 -0.0412 -0.0123 -0.0289
37 27 29 0 0 0 0 0.0001 0 0 0 0 0.0001
38 27 * 30 0- 0 0 0 0.0001 0 0 0 0 0.0001
39 29 30 0 0 0 0 0 0 0 0 0 .0
40 8 28 0 0.0438 0.0145 0.0665 -0.052 0 -0.0075 -0.0071 -0.0045 -0.0026
41 6 28 0 -0.0865 0.0204 -0.1019 0.1224 0 -0.0244 -0.0356 -0.0084 -0.0273
 5

3
Plot Area
72

O 0
1 1I2 4 5 y 7 ~8 9 10 11 12 13 14 15 16 17 18 19 2 21 2 2 2 2 2 2 2 2 3 31 3 3 3 3 3 3 3 3 4
I-

7
Q. -1

.2

J
-3

Transmission line no.

Fig 5.6: Power Flow Change vs. Transmission Line no. (Sensitivity Based)
5

+ power flow change (MW-mile r

power flow change (MW-mile r
power flow change (MW-mile r
power flaw change (MW-mile r
5 7 9 R 11 13 15 17 19 21 23 29 31 33 35 37 39 41 — — power flow change (MW-mile r
1%

-2

-3

-4
Transmission line no.

Fig 5.7: Power flow change vs. Transmission line (MW—mile method)
 250

200

e
Y
•i
150
f Transmission cost (MW-mile method)
0OY
--Transmia.ion cost (sensitivity based
e method)

100

50

1 2 3 d 5 6 7

twousectiort so.

Fig 5.8: Transaction cost vs. Transaction no.

Table 5.5: Transaction cost allocation on MW-mile and sensitivity based method

s. No. Transaction Transmission cost Transmission cost

No. (MW-mile method) (sensitivity based
method)
1 Ti 0 0
2 T2 198.7438 195.3283
3 T3 165.7424 161.5166
4 T4 118.4291 115.9837
5 T5 191.5885 200.9922

47
Cable 5.2 and Table 5.4 compare the power flow change between the MW-mile method
Lnd the sensitivity based methods due to transactions TI, T2, T3, T4 and T5 for two
lifferent cases. The corresponding curves are shown in fig. (5.2), fig (5.3), fig (5.6) and
ig (5.7). It is observed that in transactions the power flow change calculated from the
ensitivity based method is closer to the MW-mile method and therefore the transaction
osts are also closer for the sensitivity based method and the MW-mile method, both, as
hown in Table (5.3) and Table (5.5).The corresponding curves are shown in fig (5.4) and
ig (5.8). Hence we can say that sensitivity approach is equally accurate as that of MW-
zile method and it is also time saving and reliable approach.

0
 CHAPTER 6
CONCLUSIONS

A sensitivity based method is presented on the basis of full AC Newton --

Raphson load flow solution to determine the individual impact of bilateral
transactions on transmission line power flow under open access.
The methodology which makes use of single power flow solution is
compared with MW-mile method which makes use of repeated load now solution
to carryout the same task. Power flow change and transaction cost evaluated from
sensitivity based method is compared with MW-mile method and almost similar
results are obtained.
The sensitivity based method employs full AC power flow sensitivities,
which requires only single power flow even when having simultaneously multiple
transactions in the system. In addition, it provides more accuracy and the
limitations caused by DC load flow sensitivities are eliminated in the method
used.
It is turned out that for the same power transacted the charge for the
reactive power transaction is very small due to the small impacts on the
transmission power flows but DC power flow can not manage the reactive power
transaction.
 REFERENCES

[1] B. L. P. P. Perera, E. D. Farmer and B. J. Cory, "Revenue Reconciled

Optimum Pricing of Transmission Services", IEEE Tans. On Power Systems,
vol. 11, No. 3, pp. 1419-1426, Aug. 1996.
[2] Dariush Shrimohammadi, List Vieira, Boris Gorenstin and Mario V. P. Pereira,
"Some fundamental technical concept about cost based transmission pricing",
IEEE Tans. On Power Systems, vol. 11, No. 2, pp. 1002-1007, May 1996.
[3] Dariush Shrimohammadi, Chithra Rajagopalan, Eugene R. Alward and
Chifong L. Thomas, "Cost of transmission transactions: An introduction",
IEEE Tans. On Power Systems, vol. 6, No. 3, pp. 1006-1015, August 1991.
[4] Sood, Y.R.; Padhy, N.P.; Gupta, H.O.," A new method for allocating
embedded cost of transmission under deregulated environment of power
system", Power Engineering Society General Meeting 2006. IEEE
18-22 June 2006
[5] H. H. Happ, "Cost of wheeling methodologies", IEEE Tans. On Power
Systems,'vol. 9, No. 1, pp. 147-156, August 1994.
[6] Ross R. Kovacs and Allen L. Leverlett, "A load flow based method for
calculating embedded, incremental and marginal cost of transmission
capacity", transmission capacity", IEEE Tans. On Power Systems, vol. 9, No.
1, pp. 272-278, February 1994.
[7] Zhaoxia Jing; Xianzhong Duan; Fushuan Wen; Yixin Ni; Wu, F.F." Review
of transmission fixed costs allocation methods" Power systems ,Volume 4, 13-
17 July 2003
[8] Jiuping Pan; Teklu, Y.; Rahman, S.; Jun, K., "Review of usage-based
transmission cost allocation methods under open access", Power
systems,Volume 15, Issue 4, Nov. 2000
[9] Zolezzi, J.M.; Rudnick, I ., "Consumers coordination and cooperation in
transmission cost allocation" Power Tech Conferer~ce s,2003,IEEE
Bolgana ,vol 3, Volume 3, 23-26 June 2003

( :2 )
50 ~~~


[10] Rudnick, H.; Palma, R.; Fernandez, J.E., "Marginal pricing and supplement
cost allocation in transmission open access" Power Tech Volume 10, Issue 2,
May 1995 it
[11] Janusz Bialek, "Allocation of transmission supplementary charge to real and
reactive loads" Power Systems, Vol. 13, No. 3, August 1998 749
[12] J W Marangon Lima, "Allocation of transmission fixed charges: An
Overview' "PWRS, Vol11, No3, August1996
[13] Z.Q. Wu, Y.N. Wang, H.S. Qing and Y.X. Ou Yang, "Continuous integration
congestion cost allocation based on sensitivity," IEE Proc.-Gener. Trans._
Distrib., Vol. 151, No. 4, July 2004
[14] Fco. Javier Rubio-Odkriz and Ignacio J. P&rez-Arriaga, "Marginal Pricing of
Transmission Services: A Comparative Analysis of Network Cost Allocation
Methods," IEEE Transactions on power systems, vol 15, no, 1, February 2000.
[15] A. J. Conejo, F. D. Galiana, and I. Kockar, "Z-bus loss allocation," IEEE
Trans. Power System., vol. 16, no. 1, pp. 105-110, Feb. 2001.
[16] A. J. Conejo, Fellow, IEEE, Javier Contreras, Delberis A. Lima, and Antonio Padilha-
Feltrin, "Zbus Transmission Network Cost Allocation," IEEE Transaction on
power systems, vol 22, no.1, February 2007..
[17] Sotdhipong Phichaisawat Y.H. Song, "Transmission Pricing Using Improved
sensitivity Indices," Brund Institute of Power Systems, BruneiUniversity,
United Kingdom.
[18] Antonio J. Conejo,, Enrique Castillo, Roberto Minguez, and Federico Milano,
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20, no. 4, Nov 2005.
[19] Surachai chaitusaney, student, and Bundhit Eua-Arpon, member, IEEE, "AC
Power flow sensitivities for transmission cost allocation".

51
 Appendix (A)
IEEE 9- bus system data
TABLE (A 1): Bus data

©©000 ' '0

' '0 + •+ 0
00_00 - S

~D00~ '

TABLE (A 2): Line data

Bus bus R X 0.5B
ni nr p.u. p.u. p.u. tap
1 4 0 0.0576 0 1
4 5 0.017 0.092 0.079 1
5 6 0.039 0.17 0.179 1
3 6 0 0.0586 0 1
6 7 0.0119 0.1008 0.1045 1
7 8 0.0085 0.072 0.0745 1
8 2 0 0.0625 0 1
8 9 0.032 0.161 0.153 1
9 4 0.01 0.085 0.088 1

TABLE (A 3): Line capacity data and line cost data

Line
Line no Line capacity
cost($/ ear)
1 1000 250
2 3000 250
3 3000 150
4 1000 300
5 3000 150
6 3000 250
7 1000 250
8 3000 250
9 3000 250

52
 Appendix (B)
IEEE 30-bus system data
TABLE (BI): Bus data

________________________ .

00 ' • 00 ' 000

' 0'
0

000~~ •• 00000

m000~ •
' = 0'
0

I •
m0'00~ 00
' 000

m000~ 0000
m0®0® ' 00000

®0°000 • 0000
® '000® 00000
m000~ 0000'
®000' 0' • 0' 0000
m '000'
® '00000
®0000 • 00000
~D00 • • 00000

®'000 •• 0000

53
 TABLE (B 2): Line data
Bus
R X 0.5B
Line no bus tap
p•u. p.u. p.u.
nr nr
1 1 2 0.0192 0.0575 0.0264 1
2 1 3 0.0452 0.1852 0.0204 1
3 2 4 0.057. 0.1737 0.0184 1
4 3 4 0.0132 0.0379 0.0042 1
5 2 5 0.0472 0.1983 0.0209 1
6 2 6 0.0581 0.1763 0.0187 1
7 4 6 0.0119 0.0414 0.0045 1
8 5 7 0.046 0.116 0.0102 1
9 6 7 0.0267 0.082 0.0085 1
10 6 8 0.012 0.042 0.0045 1
11 6 9 0 0.208 0 0.978
12 6 10 0 0.556 0 0.969
13 9 11 0 0.208 0 1
14 9 10 0 0.11 0 1
15 4 12 0 0.256 0 0.932
16 12 13 0 0.14 0 1
17 12 14 0.1231 0.2559 0 1
18 12 15 0.0662 0.1304 0 1
19 12 16 0.0945 0.1987 0 1
20 14 15 0.221 0.1997 0 1
21 16 17 0.0824 0.1923 0 1
22 15 18 0.1073 0.2185 0 1
23 18 19 0.0639 0.1292 0 1
24 19 20 0.034 0.068 0 1
25 10 20 0.0936 0.209 0 1
26 10 17 0.0324 0.0845 0 1
27 10 21 0.0348 0.0749 0 1
28 10 22 0.0727 0.1499 0 1
29 21 22 0.0116 0.0236 0 1
30 15 23 OA 0.202 0 1
31 22 24 0.115 0.179 0 1
32 23 24 0.132 0.27 0 1
33 24 25 0.1885 0.3292 0 1
34 25 26 0.2544 0.38 0 1
35 25 27 0.1093 0.2087 0 1
36 28 27 0 0.396 0 0.968
37 27 29 0.2198 0.4153 0 1
38 27 30 0.3202 0.6027 0 1
39 29 30 0.2399 0.4533 0 1
40 8 28 0.0636 0.2 0.0214 1
41 6 28 0.0169 0.0599 0.065 1

54
TABLE (B3): Line capacity data and line cost data
Line cost
Line no Line capacity
p y ($/year)
1 1000 250
2 3000 250
3 3000 150
4 1000 300
5 3000 150
6 3000 250
7 1000 250
8 3000 250
9 3000 250
10 1000 250
11 3000 250
12 3000 150
13 1000 300
14 3000 150
15 3000 250
16 1000 250
17 3000 250
18 3000 250
19 1000 250
20 3000 250
21 3000 150
22 1000 300
23 3000 150
24 3000 250
25 1000 250
26 3000 250
27 3000 250
28 1000 250
29 3000 250
30 3000 150
31 1000 300
32 3000 150
33 3000 250
34 1000 250
35 3000 250
• 36 3000 250
37 1000 250
38 3000 250
39 3000 150
40 1000 300
41 3000 150

t;1