Title: Integrated framework for energy loss allocation in electric distribution systems under liberalised energy markets

Authors: Paulo M. De Oliveira-de Jesus, M. Teresa Ponce de Leao

Addresses: Faculdade de Engenharia da Universidade do Porto (FEUP), Electrical and Computer Department, Instituto de Engenharia de Sistemas e Computadores (INESC Porto), Dr. Roberto Frias, 378 4200-465 Porto, Portugal. ' Faculdade de Engenharia da Universidade do Porto (FEUP), Electrical and Computer Department, Instituto de Engenharia de Sistemas e Computadores (INESC Porto), Dr. Roberto Frias, 378 4200-465 Porto, Portugal

Abstract: This paper discusses an integrated framework for cost allocation of energy losses of electric distribution systems under liberalised energy markets. As key contribution is developed an allocation strategy based upon Locational and Uniform Incremental Prices. The locational incremental prices send efficient economical signals to distributed generators with incentives for loss minimisation and uniform incremental pricing are applied to consumers avoiding non-discriminatory access to the network due to the consumer|s geographical localisation. Proposed methodology has been tested and compared with different loss allocation procedures reported in literature under the scope of the social welfare theory in order to assess its impact in the market equilibrium.

Keywords: power loss allocation; energy pricing; distributed generation; deregulation; power system economics; electrical distribution systems; liberalisation; energy markets; cost allocation; energy losses; locational incremental prices; uniform incremental pricing.

DOI: 10.1504/IJGEI.2007.014353

International Journal of Global Energy Issues, 2007 Vol.27 No.3, pp.355 - 378

Published online: 03 Jul 2007 *

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