A hierarchical approach of node aggregation for transmission usage prices

Abstract

Nodes in power system are aggregated into multiple zones for the allocatian of transmission usage prices. The formation of zones depends on a set threshold, connectivity and type of pricing mechanism. In this paper, a novel concept to club the nodes into zones that are closely connected and experience similar usage prices, for few of the popular transmission pricing mechanism such as equivalent bilateral exchange (EBE), marginal participation method (MPM) and hybrid method (HM), is proposed. A concept of edge betweenness is utilized for this purpose. Also, a quality index as a function of edge weight is proposed to make decision for optimal number of zones. The efficacy of the proposed method is verified on IEEE 118 bus system.