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A cost-causal marginal participation method using min-max fairness for transmission services cost allocation

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Abstract

We consider the problem of fair allocation of the cost of a transmission system among load and generation entities using the marginal participation approach. We show that a cost-causal approach involving capacity-based line cost rate and a min-max fair economic slack bus selection for price-taking entities leads to a rigorously fair and more accurate implementation of marginal participation method. In the existing methods the counter-flows are masked, which is a compromise with fairness and linearity. However, if the counter-flows are incentivized then it can lead to pay-offs to some entities. The proposed approach solves the problem of pay-offs without masking the counter-flows. This is achieved by separation of the total transmission services cost into usage, reliability and residual capacity components. The allocation of the first two components is based on the min-max fairness policy, and the residual capacity costs are allocated on a pro-rata basis. Simulation results on multiple IEEE test systems, Indian utility power systems and extensive comparative evaluations for the contemporary methods demonstrate the claims made.

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Notes

  1. the ability to schedule the least cost resource.

Abbreviations

\({\mathcal {C}}\) :

The set of all the N-1 contingencies

\({\mathcal {K}}\) :

Constant postage stamp rate to allocate RC

\(C_{lm}\) :

Cost of line between bus l and m

G :

Set of all generator buses

L :

Set of all load buses

NetCombCost :

Network combined cost for ‘extent of use’ and reliability capacity using DC framework

NetEOUCost :

Network ‘extent of use’ cost using DC framework

NetRelCapCost :

Network cost reliability capacity using DC framework

\(P_{lm}\) :

Power flow in line lm using DC framework

\(P_{{REL}_{lm}}\) :

Reliability capacity for line lm using DC framework

\(PoC_1\) :

PoC tariff for DCPF-based proposed method

\(RC_{REL}\) :

Residual capacity cost with reliability modelling in DC framework

\(S_{lm}\) :

Capacity of the line lm in MW

\(TSU^{0}\) :

Total network cost to be recovered

UB :

Upper bound

DCPF:

DC power flow

PoC:

Point of connection tariff in ₹/MW

RC:

Residual cost of the system

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Authors and Affiliations

  1. Electrical Engineering Department, Birla Vishvakarma Mahavidyalaya Engineering College, Vallabh Vidyanagar, India

    Rashesh P Mehta

  2. Department of Electrical Engineering, Indian Institute of Technology Bombay, Mumbai, India

    M S S Rao & S A Soman

Authors
  1. Rashesh P Mehta
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  2. M S S Rao
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  3. S A Soman
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Correspondence to Rashesh P Mehta.

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Mehta, R.P., Rao, M.S.S. & Soman, S.A. A cost-causal marginal participation method using min-max fairness for transmission services cost allocation. Sādhanā 45, 183 (2020). https://doi.org/10.1007/s12046-020-01418-x

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