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Advanced transmission service charges methodologies in deregulated electricity market environment

Mohammad Radzi, Nur Hanis (2012) Advanced transmission service charges methodologies in deregulated electricity market environment. PhD thesis, University of Queensland.

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Abstract

Under the deregulation scheme, the electricity business has been separated into three parts: generation, transmission and distribution. In transmission, there are number of issues arise in the context of transmission pricing. It is very important to satisfactorily allocate the transmission service charges among all involved participants, taking into account as accurately as possible the real impact of every transaction on the transmission system. Besides this, another issue is to improve the existing transmission pricing in competitive electricity market by integrating the transmission loss component with the transmission use of system (TUoS) charges. In addition, with the presence of the renewable generation integration to the existing grid, the TUoS charging methodology also need an improvement in order to be fair and equitable to the market participants. These three main transmission pricing issues are investigated in this research. The first issue is allocating the transmission service charges fairly among the transmission users. It is essential to determine accurately the transmission-usage evaluation, allpcates the charge percentage among the users, and develops an efficient transmission pricing method. Accordingly, in this research, for fair transmission usage allocation purpose, 1. various methods based on the distribution factors (DFs) are investigated because these factors are among the efficient mechanisms to evaluate the transmission line usage accurately. However, the existing DFs based methods have limitations which prevent the wider applications of these techniques in electricity market practices. Therefore, a new technique which incorporates the justified distribution factor (JDF) approach has been proposed to evaluate the transmission line flows accurately. Meanwhile, for the transmission pricing method, the MW-mile and postage-stamp coverage method are the efficient pricing techniques which are investigated in this work to cover the transmission revenues. Many improvements have been made and implemented to the existing methods in order to develop a fair and equitable transmission service charging scheme. A suitable cost allocation percentage among the market users also is considered. The Australian electricity system is used in this research as the main examples for case studies. Currently, the National Electricity Market (NEM) is using the Cost Reflective Network Pricing (CRNP) and Modified Cost Reflective Network Pricing (MCRNP) as the transmission pricing methods. According to the National Electricity Rules (NER) under Part ' J of Chapter 6A clause 6A.23.3(c), the TUoS charges are only paid by load (customers). Hence, in order to increase the utilisation efficiency of the network, the Australian Energy II Market Commission (AEMC) has recommended amendments to the frameworks for transmission charging to increase the extent to which charges to generators (generation companies) as well as renewable generators vary by location to reflect differences in the network costs associated with their connections and use but they are still developing new schemes. Secondly, since most of the transmission utilities worldwide have adopted "lossless transmission pricing scheme", therefore in this research losses were introduced in the existing transmission pricing method in order to enhance the efficiency of the transmission pricing methodology. This research proposes a transmission pricing method which integrates transmission loss component with the Distribution Factors Enhanced Transmission Pricing (DFETP) method for pool electricity market. Two new schemes are proposed: (1) New Scheme I (NSI) - The losses are allocated only for the locational charge (2) New Scheme 2 (NS2) - The losses are allocated for both locational and nonlocational charges. Both methods use JDF to evaluate the transmission line flows more accurately. The transmission losses are allocated among the market users by integrating the Generalized Generation Justified Distribution Factors (GGJDFs) and Generalized Load Justified Distribution Factors (GLJDFs) with the existing Pro-Rata (PR) method. i Thirdly, the Australian government has introduced the expanded Renewable Energy Target (RET) scheme which aims to ensure that 20% of Australia's electricity supply is generated from renewable sources by 2020. Hence, this-will drive large changes and have direct effects on the behaviours and investments /n Australian electricity market environment especially on TUoS charging scheme. Therefore, this research is intended to explore the TUoS charging method in the Australian NEM for the development of renewable generation. There are two issues that are focused in this research: 1) the transmission configurations for connecting the remote generation cluster to the existing grid, 2) the Australian Energy Market Operator (AEMO) policy on the allocation of the cost of providing shared transmission services to different parties for new and existing terminal stations. In addition, new transmission service charging schemes for renewable energy are developed which are DFETP capacity-based method and DFETP energy-based method. These two new schemes integrate the DFETP method with the presence of the renewable generation based on capacity and energy basis. Comparisons are presented for both methods in order to identify the superior approach which reflects fair and equitable transmission sewice charging scheme as well as to promote and encourage the development of the green technology. consequently, this research focuses on the development of an efficient transmission ~ricings cheme where these main issues can be addressed properly for the Australian NEM.

Item Type: Thesis (PhD)
Subjects: T Technology > TK Electrical engineering. Electronics Nuclear engineering > TK3001-3521 Distribution or transmission of electric power
Depositing User: Normajihan Abd. Rahman
Date Deposited: 26 Dec 2013 03:23
Last Modified: 26 Dec 2013 03:23
URI: http://eprints.uthm.edu.my/id/eprint/4673
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