Transmission loss allocations and pricing via bilateral energy transactions

A new method to allocate transmission losses for simultaneous bilateral transactions under a deregulated environment is proposed in this paper. Instead of conventional single slack bus concept, the proposed approach utilizes pairs (sending and receiving) from specific bilateral transactions to calculate associated loss contributions in an interconnected transmission network. Distinguishing from other existing approaches, our method distributes losses to all sending buses according to the incurred losses along the paths. Real and associated reactive support can be calculated and allocated. It is proven that the derived operating point from our method is independent of the slack bus selection. A composite pricing strategy is proposed to allocate loss cost for each transaction. The IEEE 30 buses RTS system is used to demonstrate the effectiveness of our method.