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The Importance of Marginal Loss Pricing in an RTO Environment

✍ Scribed by Leslie Liu; Assef Zobian

Publisher
Elsevier Science
Year
2002
Tongue
English
Weight
145 KB
Volume
15
Category
Article
ISSN
1040-6190

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✦ Synopsis

With the formation of large RTOs and the move toward elimination of pancaked transmission rates, transmission prices need to re¯ect the increase in transmission losses as power moves across large geographical distances. In order for generators and consumers to receive correct short-and long-term signals with regard to transmission, the loss component should be accurately priced using marginal cost methods. Especially for systems with large ¯uctuations in power ¯ows, and hence losses, it is necessary to implement a locational real-time pricing mechanism of real-power losses.

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