Transmission cost allocation by cooperative games and coalition formation

The allocation of costs of a transmission system to its users is still a pending problem in many electric sector market regulations. This paper contributes with a new allocation method among the electric market participants. Both cooperation and competition are defined as the leading principles to fair solutions and efficient cost allocation. The method is based mainly on the responsibility of the agents in the physical and economic use of the network, their rational behavior, the formation of coalitions, and cooperative game theory resolution mechanisms. The designed method is applicable to existing networks or to their expansion. Simulations are made with sample networks. Results conclude that adequate solutions are possible in a decentralized environment with open access to networks. Comparisons with traditional allocation systems are shown and cooperative game solutions compare better in economic and physical terms.