Transmission Loss Allocation in the Deregulated Electricity Market based on the Cooperative Game Theory

Changing the structure of electrical energy markets from traditional to the restructured state, considering the loss allocation has been unavoidable. The importance of this matter is because the amount of loss consist significant part of total electrical energy. Loss in power system is a nonlinear function of power so using linear methods could not be efficient. On the other hand, applied function must consider both network characterizes and participation rate in power supplying and power consumption. The purpose of this paper is to present an applicable and modern solution based on the cooperative game theory for loss allocation of transmission lines in both pool and bilateral markets. This method has been tested on a 4 bus systems and a 14 bus IEEE.