Transmission loss allocation for a bilateral contract in deregulated electricity market

A new method for transmission losses allocation in and multiple-transaction system is presented. The proposed scheme is based on expressing losses explicitly in terms of the transactions in the system and requires power flow solution. The advantage of this method is that, unlike other proposed approaches, it does not require any simplifying assumptions. The loss allocation process emphasizes current rather than power injections, an approach that is leads to a natural separation of system losses among the network nodes.