Wheeling Charge Reflecting the Transmission Conditions based on the Embedded Cost Method

Abstract

-This paper proposes a practical and devised method for designing the wheeling charge based on the embedded cost method. In setting up the wheeling charge, one of the most important items is recovering the invested cost. Because the marginal cost method has the disadvantages regarding the above point, the embedded cost method is focused in this paper. By applying the proposed method, the wheeling charge that reflects the use of transmission systems not only gives an incentive for the efficient operation of power systems but also achieve the recovery of the invested cost by electric utilities. In order to verify the proposed method, several simulations have been conducted on the IEEE 30-bus test system.

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“…These methods consider historical investment, operation and maintenance costs, and system losses to identify total revenue requirements for the utility. Then it calculates per unit wheeling cost (e.g., $/kWh) by using the total energy supplied by a utility [22]. The downside of this method is that it does not consider wheeling distances and power; therefore, it raises the issue of fairness [21][22][23].…”

“…Then it calculates per unit wheeling cost (e.g., $/kWh) by using the total energy supplied by a utility [22]. The downside of this method is that it does not consider wheeling distances and power; therefore, it raises the issue of fairness [21][22][23].…”