IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2023i18p6635-d1240660.html
   My bibliography  Save this article

A Transmission Price Design Considering the Marginal Benefits of the Transmission and Spatiotemporal Information of Electricity Demand

Author

Listed:
  • Shuangquan Liu

    (System Operation Department, Yunnan Power Grid Co., Ltd., Kunming 650217, China)

  • Yigong Xie

    (System Operation Department, Yunnan Power Grid Co., Ltd., Kunming 650217, China)

  • Xinchun Zhu

    (System Operation Department, Yunnan Power Grid Co., Ltd., Kunming 650217, China)

  • Qizhuan Shao

    (System Operation Department, Yunnan Power Grid Co., Ltd., Kunming 650217, China)

  • Wenxuan Li

    (State Key Laboratory of Power System and Generation Equipment, Department of Electrical Engineering, Tsinghua University, Beijing 100084, China)

  • Zhuochen Guo

    (Sichuan Energy Internet Research Institute, Tsinghua University, Chengdu 610213, China)

  • Xue Liu

    (State Key Laboratory of Power System and Generation Equipment, Department of Electrical Engineering, Tsinghua University, Beijing 100084, China)

Abstract

One of the most critical tasks of China’s power sector reformation is re-designing transmission and distribution (T&D) prices, which are essential in establishing fair and ordered power markets and encouraging the efficient allocation of resources. In view of the problems in China’s power market, such as the lack of a market mechanism for the reasonable allocation of congestion revenue, unreasonable transmission cost composition, and the failure of the transmission pricing mechanism to reflect the utilization degree of transmission resources by users in different geographical locations, this study proposes a transmission price design under the application scenarios of regional power grids and provincial power grids dominated by meshed AC networks in China that considers the marginal benefit of the transmission and spatiotemporal information of electricity demand. The proposed method effectively tackles the above-mentioned problem, with the transmission cost being divided into two parts: the expansion cost reflecting the marginal benefits of transmission, and the residual cost reflecting the rest. The expansion cost is objective and based on power system economics; it is calculated as the congestion revenue under the location marginal price-based wholesale electricity markets, resulting in a more reasonable division of transmission costs and allocation of congestion revenue. Furthermore, allocating the residual cost with the power flow distribution factor and the postage stamp method also reflects the utilization degree of transmission resources by users in different geographical locations. The effectiveness of this transmission price design is confirmed by testing it against a 3-bus and an IEEE 30-bus system.

Suggested Citation

  • Shuangquan Liu & Yigong Xie & Xinchun Zhu & Qizhuan Shao & Wenxuan Li & Zhuochen Guo & Xue Liu, 2023. "A Transmission Price Design Considering the Marginal Benefits of the Transmission and Spatiotemporal Information of Electricity Demand," Energies, MDPI, vol. 16(18), pages 1-19, September.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:18:p:6635-:d:1240660
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/18/6635/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/18/6635/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wu, Zhaoyuan & Zhou, Ming & Zhang, Zhi & Zhao, Huiru & Wang, Jianxiao & Xu, Jiayu & Li, Gengyin, 2022. "An incentive profit-sharing mechanism for welfare transfer in balancing market integration," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    2. Ilic, Marija D. & Yoon, Yong T. & Zobian, Assef & Paravalos, Mary Ellen, 1997. "Toward regional transmission provision and its pricing in New England," Utilities Policy, Elsevier, vol. 6(3), pages 245-256, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yizheng Li & Yuan Zeng & Zhidong Wang & Lang Zhao & Yao Wang, 2023. "Optimal Economic Scheduling Method for Power Systems Based on Whole-System-Cost Electricity Price," Energies, MDPI, vol. 16(24), pages 1-17, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yi, Yuxin & Zhang, Liming & Du, Lei & Sun, Helin, 2024. "Cross-regional integration of renewable energy and corporate carbon emissions: Evidence from China's cross-regional surplus renewable energy spot trading pilot," Energy Economics, Elsevier, vol. 135(C).
    2. Yu, Yang & Chen, Lin & Liu, Rui, 2023. "The source of wind power producers’ market power," Energy Policy, Elsevier, vol. 173(C).
    3. Wu, Zhaoyuan & Chen, Zili & Wang, Congyi & Zhou, Ming & Wang, Jianxiao & Chen, Lin, 2024. "Unlocking the potential of rooftop solar panels: An incentive rate structure design," Energy Policy, Elsevier, vol. 190(C).
    4. Richard Green, 2007. "Nodal pricing of electricity: how much does it cost to get it wrong?," Journal of Regulatory Economics, Springer, vol. 31(2), pages 125-149, April.
    5. Ibtihal Abdelmotteleb & Tomás Gómez & Javier Reneses, 2017. "Evaluation Methodology for Tariff Design under Escalating Penetrations of Distributed Energy Resources," Energies, MDPI, vol. 10(6), pages 1-16, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2023:i:18:p:6635-:d:1240660. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.