A new transmission expansion planning framework and cost allocation method considering financial transmission rights

In this paper, we propose a transmission expansion planning (TEP) framework combined with a cost allocation method based on cooperative game theory. It is a two-step model in which the first step includes the procedure of transmission expansion plan and the latter is comprised of cost allocation process. TEP is derived based on two criteria: reliability and the economic benefits and we use the cost of expected energy not supplied (EENS) to measure the cost of reliability. Both the energy markets and transmission rights are considered in calculation of the economic benefits of the transmission expansion plan on the market participants. Then the cost of the new/upgraded transmission facilities is allocated based on the cooperative game theory. The use of cooperative game theory and the proposed payment allocation method helps to distribute the social welfare gains among the market participants justly. A 6-bus test system is used to illustrate the effectiveness of the proposed TEP framework.