Comparison of various transmission loss/cost allocation methods — A review

Transmission losses are considered to be thekey factor of power generation to meet the load requirement. Deregulated electricity markets operate under bilateral market, pool market or hybrid market. In this competitive electricity market, Independent System Operator (ISO) should allocate transmission losses among the involved partners in a fair way. Transmission loss pricing should take into account the distance between the generator and the load. This paper presents a detail discussion and comparison of five recent and relevant loss allocation methods like penalized quoted cost (PQC), proportional generation and proportional load (PGPL), proportional sharing, Zbus and modified Zbus method. The significance of PQC and PGPL methods are highlighted with other methods. The results are presented for a sample 6 bus system and IEEE 14 bus system. The simulation results are obtained using MATLAB R2014a.