Loss Allocation Research Articles

Comparison of Graph Theory Approach with other Methods on Transmission Loss Allocation Problem in Deregulated Electricity Market

In a deregulated electricity market the generating and distribution companies enter into various levels of contracts for primary energy transaction. In real time, the losses due to these contracts must be economically supplied by Independent system operators (ISOs). Graph Theory is employed in many fields of engineering especially in transmission loss allocation problem to formulate a given network’s behavior. Graph theory based loss allocation method gives satisfactory results over the other existing methods in terms of technical suitability and various transactions. Loop based representation approach is used for the network formulation. Compared to other loss allocation methods, this method distributes losses to the different participants in a lucid manner. In this paper, a comparison of graph theory based loss allocation method over the other existing methods like proportional sharing, Z bus and modified Z bus loss allocation is made. The results are shown for a sample 4 bus system and IEEE14 bus system. The simulation is carried out using MATLAB (R 2014a).

ANALISIS FAKTOR ATAS NON-PERFORMING FINANCING BPR SYARIAH DI INDONESIA PERIODE 2012-2014

The purpose of this research is to analyze the influence the Non Performing Financing in Sharia Rural Banking in Indonesia (BPRS). As some of the factors analyzed in influence of Non-Performing Financing (NPF) is Gross Domestic Product (GDP), Exchange Rates, policy type of financing Islamic banks as well as the allocation ratio murabaha receivables rather than the allocation of profit loss sharing financing (RF). The population in this study was all Sharia Rural Banking in Indonesia (BPRS). Data used was time series data with quantitative approach and analyzed using OLS (Ordinary Least Square). The result of this research indicate that the growth of GDP had a negative impact on the Non Performing Financing (NPF) and significant; exchange rate had a negative impact on the Non Performing Financing (NPF) but not significant; profit and loss sharing ratio of return on total return of financing (RR) has a significant negative effect on the Non Performing Financing (NPF). Murabaha financing allocation ratio to the allocation of profit loss sharing financing and a significant negative Effect on Non Performing Financing (NPF).

Environmental Liability Directive: Problems and possible amendments

The European Community (now European Union) adopted in April 2004 Directive 2004/35/EC on environmental liability with regard to the prevention and remedying of environmental damage. The purpose of the Directive is to establish a common legal framework of environmental liability based on the ‘polluter-pays’ principle within the EU, to prevent and remedy environmental damage. Although the environmental damage could affect various countries and international society cooperates to protect global environment such as climate change or marine pollution, there is no binding international treaty which regulates liability for environmental (per se) damages. Even the International Law Commission could adopt the Draft principles on the allocation of loss in the case of transboundary harm arising out of hazardous activities in 2006 as a non-binding principle. However, recently the EU involves the neighbouring countries for protection of marine environment based on the Marine Strategy Framework Directive and the influence of the EU law is spreading out. This means, the EU’s Environmental Liability Directive could become a model for an international treaty on universal liability regime for environmental damage.

Application of the Extension Taguchi Method to Optimal Capability Planning of a Stand-alone Power System

An Extension Taguchi Method (ETM) is proposed on the optimized allocation of equipment capacity for solar cell power generation, wind power generation, full cells, electrolyzer and hydrogen tanks. The ETM is based on the domain knowledge containing the product specifications and allocation levels provided by suppliers and design factors since most of the renewable energy equipment available in the market comes with a specific capacity. A proper orthogonal array is used to collect 18 sets of simulation responses. The extension theory is introduced to determine the correlation function, and factor effects are used to identify the optimized capacity allocation. The hours of power shortage are simulated using Matlab for all capacity allocations at the lowest establishment cost and the optimized capacity allocation of loss of load probability (LOLP). Finally, the extension theory, extension AHP theory, ETM and Analytic Hierarchy Process (AHP) are used to determine the optimized capacity allocation of the system. Results are compared for the above four optimization simulation methods and verify that the proposed ETM surpasses the others on achieving the optimized capacity allocation.

Multi-agent based Demand Response management system for combined operation of smart microgrids

Abstract This paper presents an agent based market model for combined operation of the grid connected smart microgrids with price sensitive consumers by executing demand side management strategies. This model maintains a non-discriminative market environment among the consumers and generators of the microgrids connected across the distribution system. The novelty of this agent model is in two fold. First, a novel incentive mechanism called priority banking is proposed to encourage the consumers by giving them a share in locally available generation. This mechanism also monitors how often the consumers are utilizing the incentives and thereby updates their priority. Second, after executing the contracts obtained from the market, the loss contribution of each trade to the overall network loss is calculated using a novel network loss allocation method. The applicability and effectiveness of the proposed agent based market model are exemplified using an IEEE 37 bus distribution feeder network with two grid connected smart microgrids simulated in Open DSS and the proposed multi-agent system is built on JADE framework.

Algorithm for Transmission Loss Allocation in Market-Based Power Systems with Wind Generation

This paper proposes a novel method for transmission loss allocation in restructured power systems. It is based on circuit laws and the orthogonal projection theory. In this method, the current flow in each branch is divided into two components. The first one is due to the power transfer from generators to loads. The second component is due to the voltage differences between generators’ buses. The later currents are called no-load or circulating currents. These two current components are computed by using the superposition principle. The contribution of each load and generator to power losses in each branch of the network is derived analytically. Hence, the share of each load or generator in the overall transmission network losses is estimated. Furthermore, the impact of bilateral and multilateral contracts is incorporated in the power loss allocation algorithm. The contribution of each contract to the total transmission system power loss is estimated accurately. The method also takes into account the time variation of loads and wind generation. The proposed method is applied to two test systems and compared to the prorate, game theory, and Z-bus approaches.

A multi-agent based design of bidding mechanism for transmission loss reduction

Abstract This paper investigates a new bidding mechanism to minimize the transmission losses in a day-ahead market based on generators’ power utilization ratio. A reachable set based loss allocation method is developed to assign active losses to generating companies (GenCos). The line losses borne by GenCos are characterized and measured by a loss adjustment factor. Power is allocated to GenCos based on the virtual market clearing price calculated via an iterative power adjustment procedure, aiming at minimizing the overall transmission losses. Under the multi-agent game framework, we further analyze GenCos’ responsive bidding strategy which has not been adequately addressed in literature. The performance of the proposed bidding mechanism is extensively tested on the IEEE 14-bus system. The results show that the proposed bidding mechanism is able to lower the overall transmission losses.

Loss Allocation for Weakly Meshed Distribution System using Analytical Formulation of Shapley Value

A practical loss allocation method should consider size, distance from source, and network usage of its’ participants. The power flow pattern in distribution network has changed over a period due to increased integration of distributed generation (DG) and hence, the equivalent distance and usage of network have changed for the conventional distribution network. The regulators require a fair and robust model for loss allocation which should be able to discriminate between the contributions of multiple participants. The loss allocation techniques proposed earlier in the literature either require additional quantities over and above power flow solution or are specifically developed only for radial distribution networks. This paper presents a cooperative game approach which provides stable solution integrated with appropriate penalties or rewards to participants. The proposed method provides an analytical solution which is solved using Shapley value for radial as well as weakly meshed distribution network. The memory and computational burden with the Shapley value have been overcome by a final analytical formula that satisfies the axioms of fairness. The use of the method is straightforward without any assumptions and requires only network data and power flow solution. The results are illustrated using different scenarios of DG output levels and network topologies and compared with other methods to establish its effectiveness.

Peer Monitoring via Loss Mutualization

After the 2008 financial crisis, the allocation of losses resulting from a bank bankruptcy has been one of the main policy issues. Several new regulatory provisions increased the burden of losses endured by the rest of the financial industry. For example, bank resolution schemes and mandatory clearing through Central Counterparties (CCPs) introduce mechanisms to share losses among surviving banks, with an emphasis on ensuring a sufficient loss absorption capacity. Without understating this relevant concern, this article suggests that a loss mutualization scheme may also foster market discipline by other banks (peers) if combined with an appropriate design of the relevant metrics used to allocate losses among surviving banks. The optimal design should impose higher contributions on banks with closer interlinkages with the defaulter. In this respect, the results highlight how the allocation of losses beyond the defaulter's initial contribution plays a considerable role on peer monitoring incentives.

A new graph theory based loss allocation framework for bilateral power market using diakoptics

Abstract Deregulation and privatization of power market worldwide has forced to identify the different ancillary services and the service providers so that all the services can be priced properly. Active power loss is a component that can never be avoided and constitutes a considerable part of economy. Hence, identification of the sources of active power loss is very important. In deregulated power market bilateral power trading plays a very important role where the amount of power and the flow path between the transacting generators and loads are fixed beforehand. But the power flow rarely follows contracted path, it flows according to physical property of the network. Graph theory based loss allocation methods are based on power flow paths and hence are more reliable. But proper transaction based power flow is not available and it makes graph theory based loss allocation for bilateral market a complex task. Present paper applies diakoptics algorithm to find out the loop flows that is the deviation from contracted path for each bilateral transaction which in turn allows finding out the loss allocated to any transaction. Diakoptics is a general concept in which larger problems are solved by dividing the larger problem into smaller problems and then finding out the overall solution by considering the solutions of each smaller problem together. The proposed method is applied to different test systems and results are discussed in detail.

Efficient algorithm for transmission system energy loss allocation considering multilateral contracts and load variation

This study proposes a new analytical method for transmission power loss allocation in hybrid market power systems. It is based on circuit laws and the orthogonal projection. In this method, the current flow in each branch is divided into two components. The first one is due to the power transfer from generators to loads. The second component is due to the voltage differences between generator buses. The later currents are called no-load or circulating currents. These current components are computed by using the superposition principle. The responsibility of each load and generator to power losses in each branch of the network is derived analytically. Hence, the share of each load or generator in the overall transmission network losses is estimated. Furthermore, the impact of bilateral/multilateral contracts is included in the transmission network power loss allocation algorithm. The method is extended to consider the time variation of loads and wind generation. The proposed method is applied to four test systems and compared with other methods.

A novel index for identification of weak nodes for reactive compensation to improve voltage stability

In this study, a new reactive power loss index (RPLI) is proposed for identification of weak buses in the system. This index is further used for determining the optimal locations for placement of reactive compensation devices in the power system for additional voltage support. The new index is computed from the reactive power support and loss allocation algorithm using Y-bus method for the system under intact condition and as well as critical/severe network contingencies cases. Fuzzy logic approach is used to select the important and critical/severe line contingencies from the contingency list. The inherent characteristics of the reactive power in system operation is properly addressed while determining the reactive power loss allocation to load buses. The proposed index is tested on sample 10-bus equivalent system and 72-bus practical equivalent system of Indian southern region power grid. The validation of the weak buses identification from the proposed index with that from other existing methods in the literature is carried out to demonstrate the effectiveness of the proposed index. Simulation results show that the identification of weak buses in the system from the new RPLI is completely non-iterative, thus requires minimal computational efforts as compared with other existing methods in the literature.

Transmission Power Flow Tracing and Loss Allocation using Proportional Sharing

Transmission Power Flow Tracing and Loss Allocation using Proportional Sharing

Loss allocation in distribution network with distributed generations

This study presents a new method for allocation of network losses to distributed generations (DGs) and consumers connected to radial distribution networks in context of liberalised electricity market. The study intends to deal with three aspects, namely, issue of non-linear relation between power flow and losses, change in network losses because of voltage variation and contribution of DG to the network loss. The proposed method is a branch-oriented approach based on tracing the real and reactive power of DGs and loads. It establishes a direct relationship between sending and receiving node voltages and apparent power available at the receiving node of a branch. It allocates the losses without any assumptions and approximations by employing backward sweep network reduction technique. The proposed method is simple and effective; and requires only the power flow solution to allocate the losses to DGs and loads. Pro rata method, which is based on the power rating of generators and consumers, is revisited and modified according to branch oriented approach. To show the effectiveness of the proposed method, it has been tested on two test networks, that is, 28- and 33-node test networks. The obtained results are presented, discussed and compared with other published methods.

The end of the waterfall: Default resources of central counterparties

Central counterparties (CCPs) have become pillars of the new global financial architecture following the financial crisis of 2008. The key role of CCPs in mitigating counterparty risk and contagion has in turn cast them as systemically important financial institutions whose eventual failure may lead to potentially serious consequences for financial stability, and prompted discussions on CCP risk management standards and safeguards for recovery and resolutions of CCPs in case of failure. We contribute to the debate on CCP default resources by focusing on the incentives generated by the CCP loss allocation rules for the CCP and its members and discussing how the design of loss allocation rules may be used to align these incentives in favour of outcomes which benefit financial stability. After reviewing the ingredients of the CCP loss waterfall and various proposals for loss recovery provisions for CCPs, we examine the risk management incentives created by different ingredients in the loss waterfall and discuss possible approaches for validating the design of the waterfall. We emphasise the importance of CCP stress tests and argue that such stress tests need to account for the interconnectedness of CCPs through common members and cross-margin agreements. A key proposal is that capital charges on assets held against CCP default funds should depend on the quality of the risk management of the CCP, as assessed through independent stress tests.

Loss allocation in radial distribution networks with various distributed generation and load models

Abstract This paper proposes a new method for loss allocation in radial distribution networks (DNs) considering different models of distributed generation (DG) and load in context of a deregulated environment. In the proposed method, a direct relation between real/reactive power flow in a branch and its losses has been developed without taking any assumption and approximation. Suitable expressions/relations for network power flow have been developed employing power summation algorithm. The developed expressions do not contain any cross-terms. For allocating the losses among network participants, the proposed method uses a circuit based branch oriented approach. Using only power flow results, this method employs a backward sweep network reduction technique to allocate the network losses to load/DG at various nodes. This method does not require additional step of normalization to collect the exact amount of total network losses. In the present study, different types of DG, e.g. DG injecting only real power, DG injecting only reactive power, DG injecting real power and absorbing reactive power, and DG injecting both real and reactive power are considered to allocate losses. In addition to this, various load models based on impact of voltage variation on real/reactive power consumption are also considered. To test the proposed method, modified 9-node and 33-node radial DNs have been considered. In order to show the effectiveness of the proposed method, its numerical results have been compared with those by other methods available in the literature.

Loss allocation in radial distribution networks with different load models and distributed generations

Under deregulation and competitive environment, equitable allocation of losses with increasing loads and participation of new generations is a challenging task. This study proposes a solution to loss allocation problem for radial distribution network with various load models and distributed generation (DG). The location, rating and time evolution of the loads and DGs connected to the network are considered in this problem. It traces not only real but also reactive power to identify the actual contribution of loads and DGs into the total network losses. It develops a direct relation between injected current/power of consumers/DGs and network losses. To allocate the fair losses, the proposed method assigns the cross-terms by employing the geometric scheme of allocation. To show the effectiveness of the proposed method, it has been tested on 33-node radial network. To validate the proposed method, it has been compared with other methods.

CCP Resilience and Clearing Membership

Central clearing counterparties (CCPs) have become a major concern regarding systemic risk and financial stability. Thus, assessing CCP resilience is a key challenge in the new financial landscape. We consider pre-funded waterfall resources, recovery tools and the assessment powers of major European and US CCPs. We also investigate loss allocation rules at the end of the waterfall and the impact of emerging resolution regimes on contingent liquidity obligations. As the resilience of a CCP depends on the soundness of the member base and its ability to provide funds, we question the payment capacity of a member base under normal and stressed scenarios. We show that under a cover 2 stressed scenario, member base quality erodes, jeopardising the ability of clearing members to fulfil possible contingent liquidity obligations. Conflicts of interest depending on the average quality and heterogeneity of member bases are shown to be a further matter of concern regarding CCP resilience.

The End of the Waterfall: Default Resources of Central Counterparties

Central counterparties (CCPs) have become pillars of the new global financial architecture following the financial crisis of 2008. The key role of CCPs in mitigating counterparty risk and contagion has in turn cast them as systemically important financial institutions whose eventual failure may lead to potentially serious consequences for financial stability, and prompted discussions on CCP risk management standards and safeguards for recovery and resolutions of CCPs in case of failure. This note contributes to the debate on CCP default resources by focusing on the incentives generated by the CCP loss allocation rules for the CCP and its members and discussing how the design of loss allocation rules may be used to align these incentives in favor of outcomes which benefit financial stability. After reviewing the ingredients of the CCP loss waterfall and various proposals for loss recovery provisions for CCPs, we examine the risk management incentives created by different ingredients in the loss waterfall and discuss possible approaches for validating the design of the waterfall. We emphasize the importance of CCP stress tests and argue that such stress tests need to account for the interconnectedness of CCPs through common members and cross-margin agreements. A key proposal is that capital charges on assets held against CCP Default Funds should depend on the quality of the risk management of the CCP, as assessed through independent stress tests.

Depositors' Priority Over Senior Unsecured Bondholders: A Clog in the Bank Resolution Process?

The European Bank Recovery and Resolution Directive (BRRD) requires Members States to grant retail depositors priority over senior unsecured bondholders in the allocation of losses in bank resolution or the satisfaction of claims in the event of liquidation. This provision is contained in the Directive despite concerns raised by the banking industry that depositor priority would lead to an overprotection of depositors, increase the costs of issuing senior unsecured bonds and exacerbate a systemic crisis since senior bondholders would readily “run” at the slightest hint of trouble. This work attempts an investigation of whether the BRRD grant of priority to depositors over senior unsecured bondholders is compatible with the objectives of bank resolution contained in Article 31 (2) BRRD.