Power wheeling rates based on marginal cost theory

Abstract EN

Wheeling is the transmission of power from one utility to another through the transmission network of a third party.

Wheeling rates of active and reactive power are important issues that need to be addressed.

This paper presents a non-linear optimization model based on the marginal cost theory to set wheeling rates.

It is a modified optimal power flow (OPF) model.

The objective function is to minimize the generation and capital costs of the wheeling utility.

The model consists of non-linear equality and inequality constraints.

Reactive power generation costs, transmission losses, and transmission line stability limits are included in the model.

Two systems have been studied.

The first is the IEEE 8-bus network.

The second is the network of three of the Gulf Cooperation Council states.

The results reveal that the reactive power generation costs can affect the wheeling rates and should not be ignored.

Also the transmission losses must be included in the model.

The reactive power wheeling rates can be higher than the active power wheeling rates.

The installation of shunt capacitors or Static Var Compensators might lower the wheeling rates.