Transmission loss penalty factors for area energy interchange

The concept of transmission loss penalty factors for area energy interchange is introduced. The algorithm for penalty factors is based upon the Jacobian method and reflects the current network model and operating condition. The electrical distances between energy sending and receiving points and the area inter-tie locations are considered in the calculation. A unique and important attribute of an area penalty factor is that it reflects only the portion of the internal area loss induced by the interchange with the area of interest. Because of this attribute, short-term economic transactions can be properly evaluated. Also, current trends toward open access to transmission networks bring forth the need for accurate component modeling of transmission losses. With area penalty factors, wheeling charges can be more accurately assessed for specific transactions. Practical considerations and implementation of the algorithm are discussed, and test results on an example network are presented.