Transmission loss and congestion cost allocation-an approach based on responsibility

Optimal re-dispatch to alleviate transmission congestion has been modeled as a nonlinear optimization program. A hyperbolic tangent function in the index of performance permits the dispatch of reactive power based on bids. A new approach to allocate the cost of congestion and losses to the nodes of the transmission network based on the nodes´ responsibility is proposed. This approach overcomes some asymmetries of the locational marginal pricing methods