A modified approach to transmission loss allocation using proportional sharing method for transaction based power system operation

In competitive power system all services including transmission loss need to be priced properly to improve efficiency. Though a generally acceptable method for transmission loss allocation is yet to be developed, the proportional allocation technique has wide acceptance. But this method is not directly applicable to transaction based power system due to the absence of a proper transaction based power flow. This paper presents a critical analysis on the applicability of the proportional sharing principle for loss allocation to transaction based power system and suggests a modification to the method for application to transaction based power system.