Research on How to Price Losses on Lines in Electric Power Market

Losses are more than the sum of their parts. How to price the more parts is the emphasis of this paper. This paper analyzes two kinds of loss pricing methods, one is competitive loss pricing, the other is nodal loss pricing. Aim at the above, we prepare to discuss some questions as below: the comparison of the competitive price and the average cost; the method of the competitive loss pricing; the average-loss pricing. Then, we analyzed the nodal loss pricing. In this paper, we discuss three questions around the nodal loss pricing: what are the nodal loss prices; full nodal pricing with losses and congestion; three common restrictions on loss pricing