Network reduction schemes for transmission cost allocation in multi-area systems

This work revisits two approaches to obtain the equivalent of a multi-area network. The first approach, widely adopted in the literature, computes an approximate equivalent network, while the second one reduces the system of power flow equations by Gauss elimination. To highlight the differences between the approximate and the exact approach, the equivalent networks are derived to allocate the transmission costs in multi-area systems. Here, five different allocation techniques are implemented. The performance of both approaches is validated on the IEEE Two Area Reliability Test System.