A New Economic Benefit and Use of System Method for Transmission Expansion Cost Allocation in the Competitive Market Environment
J. Nikoukar, M. R. Haghifam, G.R. Yousefi, “A New Economic Benefit and Use of System Method for Transmission Expansion Cost Allocation in the Competitive Market Environment”, International Review of Electrical Engineering (I.R.E.E.) Journal, April 2011, Vol. 6, n. 2, Apr. 2011
Abstract – The expansion of transmission systems impacts many entities in the market
environment. Each entity may fare better or worse as a result of congestion relief in the presence
of new facilities. Negatively affected firms apply their authority to prevent the expansion from
taking place. The opposition of these firms and the lack of appropriate incentives results in
insufficient investments in transmission assets. The network is being frequently used at its
maximum limits, leading to economic inadequacies and reduced reliability. Hence, there is a
necessity for effective encourage schemes for system expansion. The objective of this paper is to
introduce a simple transmission expansion pricing scheme using economic benefit and use of
system method, to allocate and price the transmission expansion among the participants.
The proposed method can utilize clearly, intelligible and the fairer for transmission expansion
cost allocation between the participants at the different uncertainty such as adding the new line,
augmenting the new generator and adding the new load to the system. Numerical example using
a test power system is presented to illustrate the effectiveness of the studied method.