Transmission loss allocation based on harmonic factor distortion in deregulated electricity supply industry

This paper proposes a new method to allocate the cost pertaining to the transmission loss due to harmonics. The proposed method which is called Generalized Harmonic Distribution Factor uses the principle of proportional sharing method to allocate the losses among the transmission users. A simple 5-bus system is used to compare the proposed method with Pro-rata and Z-bus methods. The results show that the proposed method provides a better economic signal in allocating the cost of transmission loss, which could encourage the users to minimize the losses.