A novel application of senstivity factor (PTDF) for transmission pricing evaluation in a deregulated power market

Abstract

The selection and application of pricing method is generally influenced by the concern of investors and participators. In this paper, the results of the broad assessment of the transmission pricing and the summary of potential key methodologies to explore, are listed and reported. This paper outlines a “hybrid analysis and decision-making framework" for transmission costing and pricing. The proposed hybrid framework facilitates a comparative costing approach of several widely used well-known cost allocation algorithms based online flows and a "generator contributions and transmission pricing" approach with the proposed application of power transfer distribution factors (PTDF) method. The paper reports the results of IEEE 30-bus system case study that demonstrates the effectiveness of the framework. In this paper, a full AC load flow is utilized to determine the line capacity-use, as it is evaluated by the quantity of power transmitted. This approach also allows to look into the effects of reactive power.