NDLI: Unbundling of transmission and ancillary services. II. Cost-based pricing framework

Content Provider	IEEE Xplore Digital Library
Author	Zobian, A. Ilic, M.D.
Copyright Year	1969
Abstract	For pt.I see ibid., vol.12, no.2 (1997). This paper presents a systematic framework for pricing transmission and ancillary services in competitive power markets. This framework is based on the recovery of fixed and operating costs, and it meets the traditional revenue requirements. It is practical, feasible, easy to implement, and to regulate. It can be implemented with minimum transition cost. This network flow-dependent and nondiscriminatory framework is based on the decomposition approach presented in Part I of this paper. This decomposition forms an essential part of the proposed framework for usage-based recovery of the fixed and operating costs. The transmission system related fixed cost component is recovered from all transactions based on percentage utilization of the transmission system equipment. The charge is based on the actual network power flows. The ancillary service charge for a given transaction can be computed as the sum of the costs incurred at secondary generation for compensating the imbalance caused by that specific transaction. The "path providing" function of the transmission grid is viewed as a true monopolistic service, its pricing is cost based, and charge for its use is usage based; the generation based ancillary service supply can be made competitive, its pricing is market based, and charge for it is usage based. A global overview of the proposed pricing strategy is analyzed in the context of other alternatives, especially cost-based methods. A numerical example on a five-bus system is given to illustrate the use of this pricing strategy.
Sponsorship	IEEE Power Engineering Society
Starting Page	549
Ending Page	558
Page Count	10
File Size	1345643
File Format	PDF
ISSN	08858950
Volume Number	12
Issue Number	2
Language	English
Publisher	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Publisher Date	1997-05-01
Publisher Place	U.S.A.
Access Restriction	One Nation One Subscription (ONOS)
Rights Holder	Institute of Electrical and Electronics Engineers, Inc. (IEEE)
Subject Keyword	Pricing Power generation economics Environmental economics Laboratories Load flow Cost function Mesh generation Power systems Power engineering and energy Systems engineering and theory
Content Type	Text
Resource Type	Article
Subject	Energy Engineering and Power Technology Electrical and Electronic Engineering

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1	Ministry of Education (GoI), Department of Higher Education	Sanctioning Authority	https://www.education.gov.in/ict-initiatives
2	Indian Institute of Technology Kharagpur	Host Institute of the Project: The host institute of the project is responsible for providing infrastructure support and hosting the project	https://www.iitkgp.ac.in
3	National Digital Library of India Office, Indian Institute of Technology Kharagpur	The administrative and infrastructural headquarters of the project	Dr. B. Sutradhar bsutra@ndl.gov.in
4	Project PI / Joint PI	Principal Investigator and Joint Principal Investigators of the project	Dr. B. Sutradhar bsutra@ndl.gov.in Prof. Saswat Chakrabarti will be added soon
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