Integrated framework for energy loss allocation in electric distribution systems under liberalised energy markets

Abstract

This paper discusses an integrated framework for cost allocation of energy losses of electric distribution systems under liberalised energy markets. As key contribution is developed an allocation strategy based upon Locational and Uniform Incremental Prices. The locational incremental prices send efficient economical signals to distributed generators with incentives for loss minimisation and uniform incremental pricing are applied to consumers avoiding non-discriminatory access to the network due to the consumer's geographical localisation. Proposed methodology has been tested and compared with different loss allocation procedures reported in literature under the scope of the social welfare theory in order to assess its impact in the market equilibrium.