Economic pricing techniques for transmission network in deregulated electricity market

Abstract: The aim of deregulation is to introduce an element of competition into electrical energy delivery and thereby allow market forces to price energy at low rates for the customer and higher efficiency for the suppliers. The necessity for deregulation is to provide cheaper electricity, to offer greater choice to the customer in purchasing the economic energy, to give more choice of generation and to offer better services with respect to power quality i.e. constant voltage, constant frequency and uninterrupted power supplythis paper provides a methodology to apportion the cost of the transmission network to generators and demands that use it. How to allocate the cost of the transmission network is an open research issue as available techniques embody important simplifying assumptions,which may render controversial results. In this paper three techniques namely Zbusmethod, Zbusavgmethod and Relative Electrical Distance (RED) method for the network cost allocation is compared. It has been successfully applied on an IEEE 24 bus-Reliability Test System (RTS) and the results obtained are compared.

Keywords: Transmission network cost allocation, active power flow, generator cost contribution, load cost contribution, Zbus,Zbusavg and RED.