In the restructured power market, it is necessary to develop an appropriate pricing scheme that can provide the useful economic information to market participants, such as generation, transmission companies and customers. Proper pricing method is needed for transmission network to ensure reliability and secure operation of power system. Accurately estimating and allocating the transmission cost in the transmission pricing scheme still remains challenging task. This paper gives an overview of different costs incurred in transmission transaction, types of transmission transactions and the transmission pricing methodologies. Embedded as well as Incremental cost methods are explained. It mainly focussed on determining the embedded transmission cost by various methods and compared the results for 6bus, IEEE 14bus and RTS 24 bus systems.
Deregulation of Electricity market has not only led to increase in competition among generators, but also reduced electricity prices. It has introduced several issues in the market; two of them are congestion management and market power. Due to open transmission access all the participants have equal right to access transmission network. However, they have to bear the costs incurred to accommodate their transaction. The cost allocation is still a problem to be tackled efficiently. The prevailing problem is how to allocate the congestion cost among the market participants. An efficient and fair allocation of congestion cost would result in smooth operation of transmission system. It also helps in tackling congestion and market power. This paper proposes a novel approach using Aumann Shapley (AS) method of game theory for congestion cost allocation in a deregulated electricity market. The results obtained using proposed method are compared with uplift and nodal pricing methods for IEEE 14 bus system, New England 39 bus system and 75 bus Indian power system (practical data). This comparison illustrates the pros and cons of each method.
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