Influence of improvement of generation dispatch together with generation scheduling on wheeling cost

Abstract EN

Since many years, the electricity industry is being dominated by vertically integrated utilities.

The shakeup has imposed the disintegration of the three electric power industry components: generation, transmission and distribution.

The movement of the electricity industry environment into a distributed industry environment has made the market forces to drive the electricity price and lessen the net cost through amplified competition.

The competitive electricity market environment necessitates wide access to transmission and distribution networks that connect scattered electricity suppliers and customers.

Regardless of the fact that transmission charges represent a minor proportion of overall operating expenses in utilities in competitive electricity markets, transmission pricing should be a reasonable cost-effective pointer used by the energy market to make decisions on source provision, system enlargement and reinforcement.

The operating cost of a transmission transaction diminishes if it reduces the cost of generation.

The wheeling cost can be decreased by reducing generation cost via improving generation dispatch due to either lower losses or mitigation of operating constraints, via involving generation scheduling.

This paper introduces the concepts of both electricity market and power flow tracing methods, and provides a detailed presentation of both Bialek’s tracing method and an embedded wheeling cost methodology namely ‘Line-by-line’ methodology.

The per unit cost, generation cost and wheeling cost are calculated and compared before and after the application of optimal power dispatch involving generation scheduling with the objective of minimization of all the aforementioned three costs, to an application example illustrated.