A Circuit Theory Based Method for Transmission Fixed Cost Allocation Based on the Equal-Sharing of Mutual Terms- A Game-Theoretic Rationale

This paper proposes a new method to allocate the transmission fixed costs among the network participants in a pool based electricity market. The allocation process relies on the circuit laws, utilizes the modified impedance matrix, and is performed in two individual steps for generators and loads. First: to identify the generators contributions into the usage of the transmission facilities, the generators are modelled as current injections and the loads as equivalent impedances. Second: to identify the load's contributions into the usage of the transmission facilities, the loads are modelled as current injections and the generators as impedances. To split the mutual terms between the involved components, the equal sharing principle is used and proved to be rational by the Shapley and Aumann-Shapley values as two preferred game-theoretic solutions. The proposed approach is also applied to determine the generators contributions into the loads, thus, a new concept, named, circuit-theory based equivalent bilateral exchange, is introduced. Numerical results are reported and discussed to validate the proposed cost allocation method.