A New Transmission Expansion Planning Framework and Cost Allocation Method Considering Financial Transmission Rights
Published:
Problem setting: In a power system, how to allocate the costs of new facilities and upgrades for the transmission system among the users of the grid in a fair manner.
Method: We propose a two-step model in which the first step includes the procedure of transmission expansion plan and the latter is comprised of cost allocation process. The first step is derived based on two criteria: reliability and the economic benefits. Measuring the economic benefits are straightforward. To measure the reliability, we use the cost of expected energy not supplied (EENS). Then the cost of the new/upgraded transmission facilities is allocated based on cooperative game theory. The use of cooperative game theory and the proposed payment allocation method helps to distribute the social welfare gains among the market participants justly.
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