A Combined Energy and Transmission Pricing Scheme under ACOPF Framework

The conventional transmission pricing (TP) approaches may create the payment and revenue uncertainties for the nodal entities and transmission line owners, respectively. The issues in the conventional TP approaches are resolved by introducing the market-based TP scheme. In the market-based TP scheme, the transmission line owner offers their capacities in the day-ahead market in the same way the nodal entities (i.e., generators and loads) do. The existing market-based TP approach is established under the DC optimal power flow (DCOPF) framework. However, the DCOPF may not be applicable, in case, the line resistances are not negligible or the linear approximations of the trigonometric terms are not accurate. Therefore, the aim of this work is to explore the suitability of the market-based TP mechanism under the AC optimal power flow framework. The scheduling problem is formulated using AC power flow equations and different marginal prices are calculated for the nodal and transmission entities. The proposed approach is validated through suitable studies.