1456
4, NOVEMBER 2000
port and gaining compliance factor (CF) credit (i.e., negative CF) for
the CA. The side effects include, as pointed out by the discussers, that
it may unduly stress certain transmission paths and cause unscheduled
tie-line flows (i.e., inadvertent net interchange). It is noticed that cur-
rently there is no NERC standard in place to penalize a CA for doing
so, and contrarily, the NERC CPS 1 standard actually awards this kind
of act. Of course in practice, one would not initiate control action that
would stress transmission paths.
Second, the discussers introduced the concept of ACE statistical de-
pendency. This is a very good point, but unfortunately it was not con-
sidered when we were designing the control logic. We would like to
run more simulations to investigate this issue, but unfortunately we did
not have enough time prior to the deadline of this closure.
As to the shape of the threshold used for the CPS2 control, no opti-
mization technique was used to select it. It was selected based upon a
simple idea that the threshold should be “looser” at the very early stage
of a ten-minute period. Note that the progressive ACE is equal to the
raw ACE at the starting point of a ten-minute period, and then it starts
to smooth out gradually.
Again, the authors are grateful to the discussers for their valuable
supplement to the paper.1
M. Yao et al., IEEE Trans. Power Systems, vol. 15, no. 2, pp. 852–857,
May 2000.
Discussion of “Allocation of Transmission Losses to
Bilateral Contracts in a Competitive Environment”
J. W. Bialek
The authors are to be congratulated for their interesting contribution
to the restructuring debate. I would be grateful if the authors could
comment on the following point.
Tables I and II clearly show that, if their methodology is used, the
total loss in the network, Ploss , is dependent on the order in which the
transactions are processed and the choice of the generator covering the
losses for each contract. Using the dc load flow model, the loss should
be about 18 MW (squared net flow times the resistance) and such a re-
sult is obtained when generator 1 supplies all the loss—see Case B in
Table II. In this case the extra generation of 18 MW creates a counter-
flow against the dominant line flow thus reducing the loss. Any other
loss allocation creates a higher total loss as illustrated in Tables I and II.
The general conclusion is therefore that depending on the assumption
about the loss allocation procedure, the proposed scheme may produce
a higher loss than the necessary minimum, with the increase as high
as 47% for Case B, Table I. This is clearly unacceptable as an efficient
market should maximize the societal benefit. With the contracts fixed,
this means that the losses (or their cost) should be minimized. If the
traders are free to chose where to buy their losses from, without a suit-
able coordination mechanism, then their choice may not minimize the
total cost of losses.
However one should not forget that there is no such a thing as a
pure bilateral market. There is always a need for a balancing market
(this may be in a form of a loss ancillary service), to match exactly
the demand (including losses) with generation. In such a market loss
Manuscript received September 20, 1999.
J. W. Bialek is with the University of Durham, England.
Publisher Item Identifier S 0885-8950(00)11314-8.
0885–8950/00$10.00 © 2000 IEEE
Authorized licensed use limited to: INTERNATIONAL ISLAMIC UNIVERSITY. Downloaded on July 30,2020 at 09:19:31 UTC from IEEE Xplore. Restrictions apply.
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 15, NO.
minimization can be performed by generators and loads submitting
their bids (incs and decs from the contracted power) and the central-
ized Optimal Power Flow providing the least-cost solution. The re-
sulting cost of losses can be then allocated to the contracts on the
point-to-point basis using e.g., scaled-down marginal loss factors (ob-
tained as a by-product of OPF solution) or by tracing the flow of power
in the network [11, 12]. An alternative way of loss allocation to multi-
lateral trades, using a coordination mechanism rather than a centralized
OPF, has been suggested in [5]. By comparison finding the least-cost
allocation, when using the approach proposed in the paper,1 would re-
quire permuting all the possible allocations which is obviously an ab-
surd.
Thus, the general conclusion seems to be that the important contribu-
tion of the paper1 is in providing an additional insight into the problem
rather than proposing a practical loss allocation scheme.
F. D. Galiana and M. Phelan, IEEE Trans. Power Systems, vol. 15, no. 1,
pp. 143–150, February 2000.
Closure to Discussion of “Allocation of Transmission Losses
to Bilateral Contracts in a Competitive Environment”
Francisco D. Galiana and Mark Phelan
We thank Dr. Bialek for having taken the time and effort to read our
paper1 and for his comments. Before addressing the specific criticisms
raised, it is necessary to differentiate between loss allocation and loss
dispatch. We bring up this comparison as our paper1 deals primarily
with the former topic, while the thrust of the discussion refers to issues
in loss dispatch, a topic marginally related to loss allocation.
Loss dispatch is the mechanism whereby a power system generates
transmission losses. In many systems, this function is performed by
a single generator or, more generally, by a group of generators, each
supplying a fraction of the total losses. In its more elaborate form,
loss supply is an inherent part of the optimal power flow dispatch that
implicitly accounts for transmission losses and minimizes operational
costs. Loss dispatch, whether optimal or sub-optimal, directly influ-
ences power generation and flows and, therefore, transmission losses
and generation costs.
Allocation, in contrast to supply, has no impact on transmission
losses or generation costs. It is merely an accounting scheme that
assigns responsibility among the system loads, generators, or bilateral
contracts for a fraction of the calculated or measured system losses.
This assigned fraction serves to invoice the various system users for
a share of the total losses so as to reimburse those units that generate
the actual losses. The allocation step is not required if the system is
dispatched at minimum cost subject to the full network constraints. In
this case, the nodal prices used to pay generators and charge loads,
implicitly account for network location differences, congestion and
losses. Allocation becomes indispensable when power systems are
dispatched sub-optimally, as with the merit order method in which
losses are initially neglected to determine the clearing price and the
Manuscript received November 4, 1999.
F. D. Galiana is with the Department of Electrical Engineering, McGill Uni-
versity, Montreal, Quebec, Canada.
M. Phelan is with CAE Electronics Ltd., Montreal.
Publisher Item Identifier S 0885-8950(00)11313-6.
1F. D. Galiana and M. Phelan, IEEE Trans. Power Systems, vol. 15, no. 1, pp.
143–150, February 2000.
IEEE TRANSACTIONS ON POWER SYSTEMS, VOL. 15, NO. 4, NOVEMBER 2000
base generation levels. A loss supply strategy must then be defined
by the pool independently of the merit order dispatch, to specify how
losses are generated (via a single slack or distributed slack buses).
Once selected, the supply strategy plus the base generation levels
set the conditions defining the losses, subsequently found through a
load flow calculation. The aim of allocation techniques is to take the
already calculated losses and distribute them in a “fair” manner among
the generators or loads. Note however that loss allocation cannot
minimize or in any way influence losses or the cost of generation since
these quantities are pre-determined by the loss supply scheme and the
merit order base generation.
There is however a more general fundamental difficulty with loss
allocation that cannot be over-emphasized, namely, that no method
can be said to distribute losses in a perfectly fair manner. Because
of the nonlinear nature of the loss function, it is mathematically im-
possible to separate the total losses among generators or loads in a
unique fashion, so fairness will always be open to challenge. One can
argue that some techniques are “fairer” than others. For example, those
that consider network topology, parameters and operating point may be
better in some sense than those that allocate losses in a pro-rata manner.
However, even with more elaborate approaches, the inevitable fact that
losses are mathematically nonseparable cannot be overlooked.
We agree that, in general, bilateral contracts could co-exist with pool
supply and demand. In our paper,1 we develop a theory of loss alloca-
tion where the losses for each bilateral contract are assumed to be pro-
duced by a single arbitrary generator, however, the theory also covers
the possibility that these losses are supplied by a single coordinated set
of distributed generators. Let the loss supply scheme be centrally coor-
dinated and pre-specified, say through a distributed slack bus character-
ized by the vector  whose elements satisfy the condition, 0  k  1;
n  = 1. Then, the incremental loss allocation for contract incre-
k=1 k
ment dGDij is given by,
dLij = nj 0 i dGDij (D.1)
k k
k=1
where, as shown in the paper, the parameters i can be found from
1
the well-known incremental transmission loss coefficients,
i = 1 0 @Ploss (D.2)
@Pi s Programming”
This type of coordinated loss supply implies that the bilateral contracts
would not have the freedom to choose their loss suppliers, but would be
restricted to those generators designated by the pool and defined by the
loss-supply vector . We re-emphasize however that, in our paper,1 loss
supply is a given, but, as the above equation shows, regardless of the
loss supply strategy, the incremental theory of bilateral loss allocation
is still valid.
We agree that the intricate cost minimization mechanism suggested
by Dr. Bialek could lead to “absurdly” many combinations, however
this hypothetical loss supply scheme has no bearing on the theory or the
intended applications of our paper. As argued earlier, cost minimization
is part of loss supply, not of loss allocation. Nevertheless, it would be
prudent not to discount categorically the eventual existence of a loss
supply market with a number of competing sources. This is an area
that needs additional research.
Regarding the results of Tables I and II, they merely highlight, albeit
in an intentionally exaggerated manner, the statement made earlier that
loss allocation is arbitrary and that no method could ever represent a
“true” or “exact” loss allocation. One exception to this rule is the family
of incremental allocation methods, an example of which is the method
presented in our paper.1 In contrast to “one-shot” approaches, incre-
mental schemes yield unique and exact loss allocations for infinites-
0885–8950/00$10.00 © 2000 IEEE
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1457
imal changes in bilateral contracts or load levels. Moreover, for a given
contract trajectory, the integration over all infinitesimal increments also
gives unique and exact results. What Table I illustrates is that even in-
cremental methods contain an element that leads to nonuniqueness in
the final allocation of losses. In this case, such an element is the depen-
dence of the allocation process on the path of variation of the contracts.
This is a reasonable conclusion, given the highly nonlinear nature of
the loss function that makes the allocation process nonconservative. If
the trajectory of the contracts is known, the results are unique, how-
ever if the path is unknown, then the paper recommends a uniformly
linear variation from zero to the specified transaction levels. Of course,
since they follow no path of integration, the commonly used “one-shot”
methods directly estimate the allocation levels from the final load flow
results only. This calculation is however performed independently of
how the final operating point was reached, ignoring its temporal evolu-
tion. Whether loss allocation depends or not on the temporal evolution
of loads or contracts is open to debate, however an inescapable truth
is that all loss allocation methods posses an arbitrary element. Thus,
different “one-shot” methods yield different allocation results whose
fairness will always be arguable.
Tables I and II also illustrate the potentially important effect of the
loss supply strategy on the system losses and, consequently, on the
corresponding loss allocation results. This was examined by varying
the location of the loss supply bus associated with each contract, but it
could have been tested with respect to different coordinated loss supply
strategies.
Finally, we could not agree less with the discusser’s comment that
our method provides theoretical insight but is not practical. Given
a set of incremental transmission loss coefficients, (@Ploss =@Pi )js ;
i = 1; 1 1 1 ; n, and the loss supply vector, , the bilateral contract loss
allocation attributed to the bilateral contract GDij can be estimated
through as few as two iterations of equations (D.1) and (D.2). This cal-
culation is undoubtedly practical, relying primarily on the traditional
load flow and incremental loss coefficients.
We thank Dr. Bialek again for his discussion and for this opportunity
to clarify a number of issues.
Discussion of “Large Scale Hydrothermal Optimal
Power Flow Problems Based on Interior Point Nonlinear
Marcelino Madrigal and Victor H. Quintana
The authors have presented a considerable step toward the solu-
tion of this very important and large complex nonlinear programming
problem. The discusser would appreciate the authors comments on the
following three issues:
A. It can bee seen, according to the row and column ordering
used by the authors, that inside the reordered correction equa-
tion (23) only submatrix NxP Q has the same block structure
as that of the nodal admittance matrix. It is stated in the paper
“NxP Q consist of a 4T 2 4T diagonal block:,” it is under-
standable that the authors refer only the diagonal blocks of
NxP Q , which also has off diagonal nonzero 4T 24T blocks
whenever there is a direct connection between any two nodes
Manuscript received January 18, 1999.
M. Madrigal and V. H. Quintana are with the University of Waterloo, Waterloo
ON, Canada.
Publisher Item Identifier S 0885-8950(00)11316-1.