Nondiscriminatory system losses dispatching policy in a bilateral transaction-based market

In this paper, a new method to allocate transmission losses for simultaneous bilateral transactions is proposed. The methodology uses a circuit approach of the system in conjunction with a classical power flow. For a given operating point, it is possible to derive system loss expression as a sum of partial terms due to each transaction. These transaction loss components, supplied by slack buses, can turn into costs associated with the respective transactions. Alternatively, in this paper it is proposed that each transaction provides for its own loss, thus eliminating the need for a balancing mechanism. In this case, the developed methodology evaluates the increase of active power at each transaction generator through loss contributions not arbitrarily assumed but calculated from a developed loss allocation formula. The main advantage of the developed method lies in its simplicity and capability of treating multiple transactions simultaneously.