DCOPF-Based Marginal Loss Pricing With Enhanced Power Flow Accuracy by Using Matrix Loss Distribution

On current days, many of the power markets are adopting the practice of marginal loss pricing. The DC optimal power flow (DCOPF) model is still mostly used for the purpose of market clearing owing to its simplicity, robustness and higher speed of convergence. Within the DCOPF framework, transmission line losses are represented as additional external loads on the system. In the classical DCOPF model of marginal loss pricing, as implemented in the New England market, the aggregated network loss is distributed over the system nodes in a fixed ratio. To gain more design flexibility in the distribution of system losses, a matrix loss distribution (MLD) framework is developed in this paper maintaining compatibility with financial transmission rights. In MLD, each individual line is considered separately for the purpose of loss distribution. The ratio in which the power loss in a certain line is distributed can be different from that in which the power loss in another line is distributed. The additional design flexibility thus obtained assists in making a more accurate representation of the power flow. The benefit of MLD is illustrated through a case study. An energy reference independent application of MLD is also suggested.