Title: A study on setting the wheeling rate of electricity on the basis of marginal cost

Authors: Daigo Hirano; Kenji Yamaji

Addresses: Department of Electrical Engineering, School of Engineering, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113, Japan ' Department of Electrical Engineering, School of Engineering, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113, Japan

Abstract: Electricity wheeling is defined as the transmission of electric power from a seller to a buyer through a transmission network owned by a third party and the wheeling will be brought into reality in a substantial scale by the deregulation of electric power industry. One of the important questions in the wheeling is how to set its service rate. This paper describes the methodology for setting the wheeling rate on the basis of the marginal cost theory. The problem is first formulated as a non-linear optimization program for minimizing the operation cost of a given electricity network; and then, the formulation is extended for the case where the transmission lines are allowed to be added. The applicability of the proposed method is demonstrated using simplified network models.

Keywords: wheeling rate; marginal cost; nonlinear optimisation; electricity wheeling; network modelling.

DOI: 10.1504/IJGEI.1998.071445

International Journal of Global Energy Issues, 1998 Vol.11 No.1/2/3/4, pp.195 - 202

Published online: 27 Aug 2015 *

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