Abstract—In last two decades, electricity markets have significantly restructured in both developed and developing countries. This restructuring introduced competition both wholesale and, in some cases, in the retail segments of the electric power industry. A common element of electricity restructuring is the unbundling of generation and transmission, with the latter being opened for use by all eligible market participants under the open access regime. Transmission pricing in open access regime is one of the active area of research. In developing countries, transmission pricing is mainly addressing the issue of recovering embedded cost or past investment and optimal allocation of variable cost at different nodes over the grid. Pricing methods should capable to translate transmission cost into tariffs to enable competition, lead to economic efficiency, enable the grid owner to recover his cost and more transparent to market participants while maintaining supply security and reliability of the system. This study aims at (1) motivations for electricity transmission pricing, (2) formulating AC-DC OPF based embedded and nodal pricing (3) computing prices for IEEE 30-Bus system and real transmission network of India. Study finally concluded that proposed methodology are more suitable for developing countries to fulfill their objectives of developing wholesale electricity market.

Index Terms—AC-DC OPF, Embedded cost, Nodal pricing, Transmission pricing

S. B. Warkad is with the Department of Electrical Engineering, Visvesvaraya National Institute of Technology, Nagpur, Pin-440010, India.(Corresponding author to provide phone: +919923206720; fax: +9107104-237681)
M. K. Khedkar is with the Department of Electrical Engineering,Visvesvaraya National Institute of Technology, Nagpur, Pin-440010.
G. M. Dhole Department of Electrical Engineering, Shri Sant Gajanan Maharaj College of Engineering, Shegaon, Pin-444203, India.

Cite: S. B. Warkad, M. K. Khedkar, and G. M. Dhole, "Optimal Electricity Transmission Pricing in a Restructured Electricity Market," International Journal of Computer and Electrical Engineering vol. 1, no. 4, pp. 512-519, 2009.