Security-Based Tariff for Wheeling Contracts Considering Fair Congestion Cost Allocation

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Security-Based Tariff for Wheeling Contracts Considering Fair Congestion Cost Allocation Amir Bashian · Mehrdad Hojat · Mohammad Hossein Javidi · Hessam Golmohamadi

Received: 11 September 2013 / Revised: 3 December 2013 / Accepted: 31 December 2013 © Brazilian Society for Automatics–SBA 2014

Abstract Transmission pricing is an important issue for transmission cost allocation. Because of the importance of this issue in the restructured power systems, several methods have been presented in recent years. Also, fairness of methods is a vital issue from the viewpoint of market designers and policy makers. This paper proposes a novel fair method to specify transmission tariffs, especially for wheeling contracts during peak and off-peak periods. In comparison to other recent studies, this approach has the advantage of considering congestion and security cost, when the wheeling contract leads to deviation from the optimum operation of wheeler network. Moreover, the security cost which is usually ignored in the transmission pricing will be allocated to market participants fairly. This method is applicable to implement in combined pool and bilateral electricity markets. In order to make a fair competition among market users, the congestion cost is allocated to all users in proportion to their contribution in network congestion. Compared with the current methods, the proposed approach take into consideration the congestion and security cost to strike the right balance between profit and cost related with fair market-based mechanisms. At the end, numerical examples on nine-bus test power

A. Bashian (B) · M. H. Javidi Department of Power Electrical Engineering, Ferdowsi University of Mashhad, Unit 1, No. 10, Fayaz bakhsh8 Street, Mashhad, Khorasan, Iran e-mail: [email protected] M. Hojat Faculty of Electrical Engineering, The Islamic Azad University, Shahroud Branch, Shahroud, Iran H. Golmohamadi Department of Power Electrical Engineering, The University of Birjand, Birjand, Iran

system are utilized to demonstrate the effectiveness of the proposed approach. Keywords Congestion cost · Security cost · Transmission tariff · Wheeling contract

List of Symbols Variables Fl−k 0 Fl−k

Dl−k,r

Gi Al−k,i

Cl−k, j

Cl−k,r Lj TTC TCt TP TC CC

Total transmission flow between buses l and k Transmission flow between buses l and k obtained in previous iteration D factor related to line connecting buses l and k caused by generation variation in reference bus Total generation in bus i Generation shift distribution factors (GSDF or A factors) related to line connecting buses l and k caused by generation changes in bus i D factor related to line connecting buses l and k caused by generation variation in reference bus GLDF related to the line between buses l and k caused by demand in bus r Total demand in bus j Total transmission cost The allocated cost to contract Wheeling tariff for the contract Transmission capacity cost Congestion cost allocated to contract

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J Control Autom Electr Syst

Lk Ck CCB CCS C Ni j D Ni j TPB TPS Ck BI