Distribution factors with AC power flow for electric energy transmission cost allocation

One of the key problems of energy transmission system within an independent environment refers to the necessity to establish a cost for system services on nondiscriminatory bases. A properly established cost provides economical signals for short-term and long-term recovery current expenses and for a fair cost allocation for participants. This paper aims to analyze the costs that are associated with the power transfer as well as the designing of new tools concerning the computing and the allocation of these costs. A method based on AC power flow is proposed vs. the simplified ones (based on DC power flow), existed within the literature. The power transmission costs, which are charged to the market participants, are a central issue of the new deregulated electricity markets. The method of the AC power flow based distribution factors is presented using a 12 buses test power system as case study. The results are analyzed followed by the appropriate conclusions.