International Conference on Electrical, Electronics, and Optimization Techniques (ICEEOT) - 2016
Thyristor Controlled Series Capacitor Effective
Incremental Transmission Pricing Determination
I. Kranthi Kiran
Dr. A. Jaya Laxmi
Associate Professor, Department of EEE
MVGR College of Engineering
Vizianagaram-535005, India
kranthiirinjila@yahoo.co.in
Professor, Department of EEE
JNTUH College of Engineering
Hyderabad-500085, India
ajl1994@yahoo.co.in
Abstract— Movement of electricity industry environment
from vertically integrated one to a distributed one has imposed
the disintegration of the electric power industry components like
Generation, Transmission and Distribution, made the market
forces to drive the electricity price and lessen the net cost through
amplified competition. The competitive electricity market setting
imposes extensive contact to transmission and distribution
networks, and connects scattered electricity suppliers as well as
customers. Transmission charges signify a minor proportion of
overall operational expenses in utilities in competitive electricity
markets and hence transmission pricing or wheeling cost need to
be a reasonable cost-effective pointer used by the energy market
for decision making on source provision, system enlargement and
system reinforcement. The wheeling cost can be decreased by
reducing power loss via incorporating proper FACTS (Flexible
Alternating Current Transmission System) equipment. This
paper presents the concepts of deregulation of electric power
industry, wheeling and Incremental wheeling cost computation
methodologies, a detailed presentation of two types of long-run
incremental wheeling cost computation methodologies, and
provides a wheeling cost reduction technique involving optimal
placement of Thyristor Controlled Series Capacitor (TCSC) of
suitable capacity. The per unit wheeling cost and annual
wheeling cost are calculated and compared before and after the
placement of suitable TCSC with the objective of minimisation of
the aforementioned two costs, by the wheeling cost reduction
technique applied to two standard IEEE bus systems.
Keywords — Deregulation;
Incremental wheeling cost
Wheeling;
Wheeling
cost;
I. INTRODUCTION
The electricity market restructuring introduced several
independent new entities and classified them into two
categories namely ‘Market operator’ and ‘Market
participants’, including the redefinition of possible activities
of existing market players. Independent System Operator
(ISO) is the market operator in electric power market whereas
market participants include mainly GENeration COrporations
(GENCOs), TRANSmission COrporations (TRANSCOs),
DIStribution COMpanies (DISCOMs), RETAIL COrporations
(RETAILCOs) and Customers[10].
The objective of electricity market is warranting an
economical operation aiding a secured operation. In a
restructured power environment, the reduction of per unit cost
of electrical energy is the primary motive behind all activities.
978-1-4673-9939-5/16/$31.00 ©2016 IEEE
Depending upon its specific application, price forecasting can
be categorized into short-term covering few days, mid-term
stretching few months and long-term ranging few years.
Secured power system operation could be assisted by utilizing
available different services in the market whereas economical
operation of power system would reduce the per unit cost of
electrical energy [7].
ISO is an independent entity which takes care of various
services like supply of backup reserves, or supply of reactive
power from other system entities, in order to maintain system
reliability and system security. It’s participation in the
electricity market trade is zero and usually it doesn’t involve
in electricity generation except for certain cases demanding
reserve capacity. ISO is the entity which keeps tracking of
various power trading transactions that takes place between
various market participants. GENCO is a power producer that
bids power into the competitive market. TRANSCO is a
monopolistic franchise that owns the transmission lines
operated by ISO to move bulk power. In some deregulated
power structures, TRANSCO itself acts as ISO, performing
managerial and engineering functions leading to smooth
system functioning. TRANSCO is paid ‘wheeling cost’ for
usage of its facilities. DISCOM is a monopolistic franchise
that either delivers power to the end-use customers directly or
buys wholesale electricity from spot market or through direct
contracts with GENCO to supply it to end-use customers. It
obtains its revenues by billing for delivery of electric power.
RETAILCO buys power from GENCO and vends it directly to
the consumers. Customer buys electricity directly from
GENCO, local DISCOM or spot market, and consumes
The power industry deregulation merits include lesser
tariff, more choice for customers to buy electricity, better
customer-centric service and innovation towards service
improvement for profit maximization [12].
II. WHEELING
The deregulation of the industry has provided a new
dimension of electrical energy where electrical energy is being
considered as a commodity. The ‘commodity’ status has
attracted admittance of private players in the electric power
sector. In restructured electricity market, an entity that
generates power doesn’t have to own power transmission
lines; only a connection to the network or grid. Wheeling
involves transfer of power between a seller and a buyer
through a transmission company of a third party [13]. Thus
wheeling occurs when one utility performs an electric power
transmission service for another utility and the one performing
the service is neither a buyer nor seller of the power. The
seller of electricity pays wheeling cost to the owner of
transmission network based on how much power is being
moved. Thus the transmission company plays a vital role due
to its involvement in the determination of cost involved for
wheeling transactions [9].
In the traditional regulated power market, wheeling
transactions have accounted for a small portion of the overall
transmission network capacity usage and the electricity bill
consists of a single amount to be paid towards the generation,
transmission and all other costs. However, recent trends of
unbundling have stimulated renewed interest in pricing of
transmission services, particularly as it relates to wheeling
transaction and the electricity price gets segregated into price
of electrical energy, wheeling charges and price of other
services like frequency regulation, voltage control etc.[11].
The entry of private players into the deregulated power
industry calls for introduction of fair and transparent set of
rules for running the power business. To create a fair
framework and to promote competition, certain core
regulatory principles must be employed in the determination
of wheeling charges in order to recover the capital cost and
operating cost, to encourage efficient usage of the system, to
offer a simple and understandable price structure and to
provide equal opportunity to all users [3].
III. INCREMENTAL WHEELING COST METHODOLOGIES
Incremental cost is the revenue requirement for new
facilities explicitly accredited to transmission service
customers. Incremental cost computation methodology
involves the determination of cost of reinforcement and
change in operating cost. Incremental cost computation
methodologies include Short-Run Incremental Cost (SRIC)
pricing methodology and Long-Run Incremental Cost (LRIC)
pricing methodology [8].
Evaluation and assignment of operating cost associated
with a new transmission transaction is dealt by SRIC pricing
methodology. The operating costs can be estimated with an
optimal power flow model accounting for every operating
constraint together with transmission system constraints and
generation scheduling constraints, which is an advantage to
the transmission network owners [1]. However, while
evaluating operating costs, this pricing methodology should
forecast future operating scenarios so as to forecast operating
costs in order to provide timely economic signals to
transmission customers. The accurate evaluation of the cost of
a single transaction when multiple transactions occur
simultaneously and to allocate SRIC among several
transactions is difficult. SRIC of a transmission transaction
can be negative.
LRIC pricing methodology involves evaluation and
assignment of both operating and reinforcement costs
associated with a new transmission transaction. The operating
cost component may be estimated based on the same principle
as SRIC pricing methodology and the reinforcement cost
based on the changes caused in long-term transmission plans
due to the transmission transactions. However the
reinforcement cost computation involving least cost
transmission
expansion
problem
solving,
though
straightforward, is challenging.
It is difficult to allocate LRIC among several transactions.
Like operating costs, reinforcement costs could be negative
indicating that the transaction has resulted in the deferral of
planned transmission reinforcements. The advantages of LRIC
pricing methodology are more stable prices in the long-term
than in short-run and users experience of full long-term costs
of their actions including the new investment costs. However
the demerits of LRIC pricing methodology are difficult
estimation of the investment cost, difficult evaluation of costs
caused by the individual transactions and problems during
simultaneous occurrence of multiple transactions.
The two LRIC pricing methodologies are Standard LRIC
pricing method and Long-Run Fully Incremental cost pricing
method. In Standard LRIC pricing method, the reinforcement
cost and the change in operating cost have to be accurately
allocated to each wheel in case of multi-utility wheeling in the
wheeling period. This method determines required
reinforcements and matching investment schedules in the
absence of and in the presence of each wheel during wheeling
period, using customary system planning approaches.
Four different Standard LRIC pricing methodologies are
Rupees per MW allocation method, Rupees per MW.Km
allocation method, Interface flow Allocation method by
Regions and One-by-one allocation method.
Long-Run Fully Incremental cost pricing method does not
allow excess transmission capacity to be used by a wheel but
forces reinforcement along the path of the wheel to
accommodate it. Thus this method involves individual
consideration of every wheel and hence need not have to
reallocate reinforcement cost among discrete wheels.
A. Cost data and Technical data
The data requirements for the wheeling cost computation
by Standard LRIC pricing methods are as follows:
a. Year-wise Production costs in the absence of wheeling.
b. Year-wise Production costs in the presence of wheeling
increments and reinforcements.
c. Capital cost.
d. Year-wise and project-wise capital investments during
wheeling period in the absence of wheeling.
e. Book life related to ‘d’ in years.
f. Tax life analogous to ‘d’ in years.
g. Ratio of interest-free investment costs to investment costs
in ‘d’.
h. Year-wise and project-wise capital investments during
wheeling period in the presence of wheeling increments.
i. Book life equivalent to ‘h’ in years.
j. Tax life linked to ‘h’ in years.
k. Ratio of interest-free investment costs to investment costs
in ‘h’.
l. Tax depreciation rate on original cost in per unit for every
investment in 'd’ and 'h' for every year of book life.
B. Preliminary calculations
A preliminary computational procedure to determine t each
reinforcement’s investment cost throughout wheeling period
by all four allocation methods is as follows:
Long-run standard incremental cost methods involve the
identification of reinforcement projects during wheeling
period by conventional planning techniques as well as
consideration of relevant capital investments for every
company or region. Data items 'd' to 'g' hold the capital
investments during wheeling period in the absence of
wheeling and data items 'h' to ' k 'contain capital investments
during wheeling period in the presence of wheeling
increments, for the first three Standard LRIC pricing
methodologies. For the fourth Standard LRIC pricing method,
the capital investments in data items 'h' to 'k' have to be
provided separately with every wheel considered successively.
Annual Revenue Requirements (ARR) linked with every
reinforcement mission and their Present Worth Revenue
Requirements (PWRR) delivers a better representation of its
costs[2].
C. Computation of ARR, PWRR and Change in PWRR
Every capital investment listed in 'd' and 'h' need to be
converted to an ARR from the mission's in-service year over
its book life. Each year’s ARR of a project comprises of the
total of depreciation, return on equity, insurance and property
tax. At the mission's in-service year, the current worth of
every year's ARR has to be computed for each mission and all
need to be summed up to get PWRR. Consequently, current
worth of every PWRR need to be found at the start of
wheeling period starting from the mission's in-service year.
If PW1 represents the sum of PWRR of all reinforcement
missions in the presence of wheeling increments and PW2
represents that associated in the absence of wheeling, then the
change in PWRR in Rs. at the first year of the wheeling period
due to all reinforcements in the presence of wheeling
increments is given by ΔPW= PW1-PW2
D. Rupees per MW allocation method
This method involves the development of annual cost per
MW wheeled for reinforcement cost and for the amendment in
operating costs, and then the allocation of wheeling costs for
all wheeling increments [4]. In case of LRIC, the transmission
pricing is based on future investments and operating costs
levelized with inflation rate considered thereby resulting in an
Annual Levelized Charge Rate (ALCR).
The step-wise procedure for the determination of annual
wheeling cost during each study year involves the calculation
of different annual costs as follows:
1. Reinforcement cost in Rs.= ALCR *ΔPW
2. Reinforcement cost in Rs. per MW wheeled =
Reinforcement cost in Rs./Sum of Individual MW
wheeling increments
3. Reinforcement cost per wheeling increment in Rs., ΔIC =
MW wheeled * Reinforcement cost in Rs. Per MW
wheeled
4. Change in Operating cost in Rs. per MW wheeled
= ΔOC/Sum of Individual MW wheeling increments
5.
6.
Change in Operating cost per wheeling increment =MW
wheeled * Change in Operating cost in Rs. per MW
wheeled
Total Wheeling cost per wheeling increment in Rs., ΔC=
ΔIC+ΔOC
E. Rupees per MW.Km allocation method
This method involves the development of annual cost per
MW.Km wheeled for reinforcement cost and for the
amendment in operating costs, and then the allocation of
wheeling costs for all wheeling increments [5]. In case of
LRIC, the transmission pricing is based on future investments
and operating costs levelized with inflation rate considered
thereby resulting in an Annual Levelized Charge Rate
(ALCR). This method demands two power flow executions for
each year of study period, one without wheel and other with
wheel, for each wheeling increment. From the two power flow
solutions, the sum of individual ΔMW.Km for all wheeling
utility lines 'i' using the equation (1) and for all wheeling
increments ‘q’ through SD using the equation (2) are resolved
as follows:
ΔMW.Km = Σ ΔMW.Km
(1)
i
SD = Σ ΔMW.Km
(2)
q
The step-wise procedure for the determination of annual
wheeling cost during each study year involves the calculation
of different annual costs as follows:
1. Reinforcement cost in Rs.= ALCR *ΔPW
2. Reinforcement cost in Rs. per MW wheeled =
Reinforcement cost in Rs./SD.
3. Reinforcement cost per wheeling increment in Rs., ΔIC =
ΔMW.Km * Reinforcement cost in Rs. Per MW wheeled
4. Change in Operating cost in Rs. per MW.Km wheeled =
ΔOC/SD
5. Change in Operating cost per wheeling increment
=ΔMW.Km * ΔOC/SD
6. Total Wheeling cost per wheeling increment in Rs., ΔC=
ΔIC+ΔOC
IV. FACTS DEVICES
Bulk power is transmitted from economic sources via
transmission lines to load centers. However, the corridors
operation is embarrassed by margins of one or more network
parameters (e.g. line impedance) and operating variables like
voltage and current. As a result, a power carrier may not carry
adequate power and hence may demand for a parallel
transmission line. However the optimum usage of existing
transmission system may overcome this demand. The stagnant
power converters usage in electric power network has the
capacity of raising the transmission network capability and
improving the power quality. It can be achieved by a set of
static equipment called ‘FACTS controllers’ used for
transmission of the electrical energy, to escalate the network
power transfer capability and to enhance controllability.
FACTS devices application provide better operation of
existing transmission system assets, surges reliability of
transmission system, rises dynamic and transient grid stability,
diminishes loop flows and escalates power quality for delicate
industries and ecofriendly benefits[6].
decrease the equivalent inductive reactance of the TCSC so as
not to exceed this limit (Limit-F).
A. TCSC
The structure of TCSC is exposed in Fig.1. TCSC
comprises a capacitor bank (C) cascaded with the transmission
line, a parallel Metal Oxide Varistor (MOV) to protect the
bank against overvoltage and a Thyristor Controlled Reactor
(TCR) branch, with thyristor valve in series with a reactor and
is in parallel with the capacitor.
A: Firing angle limit B: Thyristor blocked
C: Maximum voltage limit D: Fully thyristor conduction limit
E: Firing angle limit F: Harmonic heating limit
G: Thyristor current limit
Fig.2. Operating range of TCSC
V. RESULTS
Fig.1. Basic structure of TCSC
At fundamental system frequency, TCR is delay angle
controllable and unceasingly adjustable reactive impedance,
XL(α). TCSC’s steady-state impedance is the resultant of
XL(α) and a shunt connected fixed capacitive impedance, XC
as shown in equation (3).
XTCSC(α) = XL(α).XC/(XL(α)-XC)
(3)
The TCSC impedance operating range variation against
line current is shown in Fig.2. For low line current, TCSC can
provide maximum capacitive compensation and inductive
compensation according to the resonant firing angle. In the
capacitive region, the minimum firing angle allowed is above
the resonant firing angle (Limit-A) and maximum firing angle
allowed is lower than the resonant firing angle (Limit-E) in the
inductive region. In the capacitive region, voltage drop across
the TCSC increases with line current. During normal
operation, as firing angle increases towards 1800, the
equivalent capacitive reactance of the TCSC reduces thereby
reducing voltage drop across it (Limit-C) and hence
preventing overvoltage occurrence across the TCSC. In the
inductive region, as the magnitude of the line current
increases, the harmonic heating limit of the thyristor valves
reaches. However, the firing angle should be reduced to
A software package is developed in MATLAB language
to compute the per unit wheeling cost and annual wheeling
cost in the absence of TCSC and in the presence of TCSC with
the aim of minimization of wheeling cost, with a seller at
bus-3 selling 50 MW to a buyer at bus-8 continuously for
three years in both IEEE 14-bus and IEEE 30-bus systems.
Rupees per MW allocation method and Rupees per MW.Km
allocation method are applied for the aforementioned bus
systems.
Tables 1and 2 present per unit wheeling cost and annual
wheeling cost determined by Rupees per MW allocation
method and by Rupees per MW.Km allocation method, for
IEEE 14-bus system, in the absence of TCSC and in the
presence of TCSC of -0.0491Ω reactance in transmission line
numbered 2.
Tables 3 and 4 present per unit wheeling cost and annual
wheeling cost determined by Rupees per MW allocation
method and by Rupees per MW.Km allocation method, for
IEEE 30-bus system, in the absence of TCSC and in the
presence of TCSC of -0.28Ω reactance in transmission line
numbered 36.
Table 1. Wheeling costs obtained by Rupees per MW allocation method for
IEEE 14-bus system
Without TCSC
With TCSC
Year
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
1
2
3
102.30
81.30
67.36
89.61
71.22
59.00
93.74
72.74
58.80
82.11
63.72
51.50
Table 2: Wheeling costs obtained by Rupees per MW.Km allocation method
for IEEE 14-bus system
Without TCSC
Year
Per unit
wheeling
cost in Rs.
1
2
3
34.10
27.10
22.45
With TCSC
Annual wheeling
cost in crores
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
29.87
23.74
19.66
31.25
24.25
19.60
27.37
21.24
17.16
Table 3: Wheeling costs obtained by Rupees per MW allocation method for
IEEE 30-bus system
Without TCSC
With TCSC
Year
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
1
2
3
49.59
40.40
34.30
43.43
35.38
30.04
41.03
31.84
25.73
35.93
27.88
22.54
Table 4: Wheeling costs obtained by Rupees per MW.Km allocation method
for IEEE 30-bus system
[4]
[5]
[6]
[7]
[8]
[9]
[10]
[11]
[12]
Without TCSC
With TCSC
Year
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
Per unit
wheeling
cost in Rs.
Annual wheeling
cost in crores
1
2
3
16.53
13.47
11.43
14.47
11.79
10.01
13.68
10.61
8.58
11.97
9.29
7,.51
VI. CONCLUSIONS
The drive of traditional regulated set up of electricity
market to deregulated one need to provide right economic
signals to its participants to ensure reliable and secured
operation of overall power system. Wheeling of electric power
is a predominant unbundled amenity to be priced strategically.
The presence of TCSC of suitable capacity in a suitable
location has reduced apparent power loss in both IEEE 14-bus
and IEEE 30-bus systems thereby reducing per unit wheeling
cost and hence annual wheeling cost. Proper economic signals
to the participants can be provided with the inclusion of proper
cost data and technical data. This paper provides a scientific
basis for arriving at the wheeling cost and for wheeling cost
reduction with optimal placement of a suitable FACTS device.
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