Electricity Market Transmission System Pricing - Financial Flow Technique

Exhibitor: Yen Ting Wee

Supervisor: Zhao Dong

Research Group: Complex and Intelligent Systems

Industry Sector: Energy and Utilities

The electricity market around the world has undergone major structural change for the past few years thus creating competition. This resulted in unbundling of the vertically integrated utilities such as generation, distribution and retailing. Due the large economics of scale, transmission is a naturally monopoly in most countries. As the trend of the electrical industry is heading towards more Open Transmission Access, transmission service is on its way to integrate onto the unbundling process to ensure fair and non-discriminatory transmission access.

Efficient pricing in transmission service plays an important role that it is necessary to send correct economic signals to transmission users relating to operation of exiting capacity, investment in new capacity, and forecasted demand. This thesis will identify the essential ingredients required to determine the transmission method and price.

Most present transmission pricing methods do not take into account the cost of construction and maintenance. Thus it resulted in losses. The present disadvantages of the transmission pricing methods were identified to highlight the factors that cause underinvestment of the transmission network. An example is the recent major blackout that struck in U.S on 14th Aug 2003.

In view of this, my thesis introduces a new transmission pricing method called Financial Flow Technique which will attract more investments into the transmission sector. This method deals with the present disadvantages of transmission pricing methods and also proves to be fair and transparent in its pricing methodology. A case study was hence performed on a 3-bus system to demonstrate its theory and application.

Thesis Document (PDF)

Poster Presentation (PDF)