Allocation of transmission loss cost using game theory

This paper presents a novel procedure for the allocation of active and reactive power losses among generators and loads in the transmission grid. The procedure considers the grid as a block, making it unnecessary to analyze the elements within that block. The method allocates the active and reactive power losses jointly by using the circuit theory combined with the game theory (Aumann-Shapley). Arbitrarily, half the losses are allocated to the loads and half to the generators. The method was tested on a 5-bus sample system and on the IEEE 30-bus system. The results show that the method provides a consistent assignment of responsibilities, reflecting the generator and load locations in the grid and in agreement with the circuit laws.