AC power flow sensitivities for transmission cost allocation

Under competitive environment of electric supply industry, customers will have options to purchase energy and services from different sources. For this implementation, transmission cost allocation is an important issue to be considered. This paper proposes a method for allocating transmission costs to all participants based on the ratio of incremental power flow caused by each participant and the transmission line capacity. The proposed method employs full AC power flow sensitivity analysis, which provides more accurate results than the ones derived from DC or decoupled power flow. In addition, it can also manage the reactive power transaction. The proposed method has been applied with the case studies of IEEE 30-bus test system. Encouraging results have been obtained.