Real and reactive power allocation in bilateral transaction markets

In deregulated power systems, transmission networks are available for third-party access to allow power wheeling. In such a deregulated environment, the ancillary services are no longer treated as integral to the electricity supply. They are unbundled and priced separately, and system operators have to purchase ancillary services from ancillary service providers. Issues pertaining to costing of ancillary services, and hence appropriate pricing mechanisms for all market participants to recover the costs, become an important issue for proper functioning of the system. This paper presents a method able to allocate real power losses and reactive power support to each transaction in a multi-transaction environment. The approach utilizes a static power system representation in terms of nodal admittance matrix in conjunction with a classical power flow. With this formulation, it is possible to derive system losses as well as reactive supply expression as a sum of partial terms due to each transaction.