Power Vector Coordination of Socially Stable Multilateral Trades

Abstract

This paper presents a new set of methodologies and tools to implement multilateral trades in a restructured electricity market. Loss minimization is made an objective, realized through elasticized transmission charge. This charge is designed to acts as a financial instrument that penalizes deviation from least loss formulation. To reduce its impact coalition formation is envisaged in a cooperative game theory environment. Power vectors are derived to guide coalitions. Marginal vectors are used as socially stable pay-off vectors to share the charges. This model that exemplifies an electricity market is proposed as most suitable since all aspects are based on market engineering principles. A five bus power system is used to illustrate the suitability.