Transmission loss allocation for mixed pool and bilateral markets

This paper proposes a new method for allocating transmission loss in mixed pool and bilateral markets. The proposed method is based on an actual loss formula. In addition, the concept that the more the power is transferred, the larger the losses it should be responsible for is used. In this paper, power loss occurring in the pool market will be compensated by the representative generator and the loss occurring in the bilateral market will be compensated by the participants of that transaction. Then a simple calculation for Locational Marginal Price (LMP) for the power pool is presented. This method is tested with IEEE-RTS-79 test system. Satisfactory results are obtained.