Performance Evaluation of Embedded Transmission Tariff Models for Deregulated Electricity Market
Chiedozie Francis Paulinus-Nwammuo,
Damian Obioma Dike,
Moses Izuchukwu Adinfono,
George Ogu
Issue:
Volume 6, Issue 3, May 2017
Pages:
16-26
Received:
16 March 2017
Accepted:
13 April 2017
Published:
1 June 2017
Abstract: During the regulated power system era, the three major components of the power system are treated as a single entity and managed by same firm. Electricity was then treated more as a welfare commodity based on political patronage. With the wide adoption of deregulation, which resulted in the wholesome privatization and commercialization of the generation and distribution components, the transmission facility was left in the hands of the Government. Considering that this is a sure link between the other two, there is greater need to develop a mechanism for its appropriate tariff determination in order to ensure fairness to all its users. A significant deficiency in its pricing is the non-inclusion of the reactive power component, which is seriously needed to ensure system stability. This work involved the performance evaluation of four embedded transmission pricing models. Based on the need to build-in payment for reactive power which is necessary to ensure system stability, further presents an improved postage stamp transmission tariff-pricing model that incorporates both real and reactive component of power. The Postage stamp method calculates all the network costs and divides it by the overall power transmitted through it. This single rate is charged to users irrespective of the source and destination of power transactions. This is a simpler, fairer and easier to implement approach for computation using Matlab and Excel Software packages. The proposed method gave average price of 29.48$/hr as against $27.75/hr when reactive power was not included for the South African 18-Bus System. This showed slight improvement when compared to the conventional approach where reactive power was not included in the power transaction. It may be applied in developing countries like Nigeria where Government is gradually pulling out of full funding of the power sector, and seeking for technically sound and financially buoyant local and foreign firms to take over significant part of the sector. The distance flow based and cost flow based methods showed very higher costs which may not be suitable for developing countries at their present stage of deregulation due to very low income per capita and low level of industrialization.
Abstract: During the regulated power system era, the three major components of the power system are treated as a single entity and managed by same firm. Electricity was then treated more as a welfare commodity based on political patronage. With the wide adoption of deregulation, which resulted in the wholesome privatization and commercialization of the gener...
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