REaD (Resources, Energy, and Development)
Year 2006, Volume-3, Issue-1 (March)
Print ISSN : 0973-0516
Analysis of transmission-embedded cost allocation schemes in open electricity markets
Authors: CW Yu, YK Wong
Transmission services have to be provided as a separate item in a deregulated or vertically restructured electricity supply industry. Methods for transmission line fixed-cost allocation among the transmission transactions accounting for line capacity use are presented. Cost allocation to each transaction will be according presented. Cost allocation to each transaction will be according to the capacity use patterns throughout an accounting period in to the capacity use patterns throughout an accounting period in an equitable manner. The allocation problem is approached from the point of view of a cooperative game theory.This paper presents four allocation schemes, namely, the MW-mile method, individual-cost method, nucleolus method, and Shapley value method for equitable allocation of transmission network fixed-cost recovery. Desired properties of cost allocation schemes are discussed. The pros and cons of these allocation schemes and their fulfillment of the desired properties are investigated and compared.
