Allocation of transmission losses in a deregulated power system network

Full deregulation would allow bilateral contracts between the suppliers and the buyers. This concept, however, leads to the confusion of transmission loss sharing and generation of the reactive power. Two methods, incremental load flow approach (ILFA) and marginal transmission loss approach (MTLA), have been developed to determine a generator's share of transmission loss in a fully deregulated power system. ILFA is very simple and employs the load flow technique in an iterative way. MTLA is basically a mathematical modeling of the transmission losses based on Kron's loss formula in a fully deregulated network. It calculates marginal increase in transmission loss due to an increase in load. These methods along with some numerical results have been presented in the paper.