Sharing of inter state transmission losses
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Sharing of Inter-State Transmission Losses. Introduction. Losses are physical phenomenon while transportation of electric energy from generation to load Fixed losses core or iron losses in transformers, losses in shunt devices such as shunt reactors, shunt capacitors etc

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Sharing of Inter-State Transmission Losses

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Sharing of inter state transmission losses

Sharing of Inter-State Transmission Losses



  • Losses are physical phenomenon while transportation of electric energy from generation to load

    • Fixed losses

      • core or iron losses in transformers,

      • losses in shunt devices such as shunt reactors, shunt capacitors etc

      • SVC, part of losses in HVDC terminals and other FACTS devices

      • Generally depend on system voltage and thus constant.

    • Variable losses (I2R)

      • Copper losses in transformers, transmission lines

      • Depend on load current

      • Load current varies with quantum of load and thus variable

      • Resistance of lines and thus on line lengths

    • In transmission system variable losses >> fixed losses

      • Thus generally losses proportional to load and distance of transportation



  • Development of ISTS system

    • 1960-70: State systems connected with few inter-state lines,

    • 1970-80: Development of Central Generators and their associated transmission system.

    • 1991: POWER GRID came in existence and transfer of associated system to new company

    • Post 2k/2003: ISTS licensees

  • Treatment of losses

    • Individual line losses

    • Associated Transmission losses with individual generator

    • Pooled losses



  • Sharing of Transmission losses

    • 1960-70: Based on drawal on individual lines on some mutual/collective understanding

    • 1970-80: based on drawal or actual energy allocation from concerned generator.

    • 1990: Regional Pooled losses with some exceptions in proportion to the energy drawal.

    • Post ABT: Estimated Regional Pooled losses in proportions to schedules from Grid.

    • In all above drawee utilities used to bear the losses

  • Inter-regional Transactions:

    • Regional (whether pooled or otherwise) losses and inter-regional link losses.

    • Inter-regional link losses merged with regional pool

    • Thus regional postage stamp for losses.



  • Other changes

    • Sharing of losses for some state networks

      • In schedules….. SR

      • In actuals… NR

    • Operation of ‘POWER EXCHANGES’ in 2008

      • Based on point of connection (connection to which region)

      • Injector /drawee both have to bear losses

      • Wheeling region losses only if studies prove it.

New regulation for sharing of losses

New Regulation for sharing of losses

  • CERC Regulation on sharing of ISTS charges and losses

    • Regulation notified in in June 2010

    • NLDC has prepared procedure in compliance with Regulation 6(1)

    • Formation of Implementation committee and various meetings of Implementation committee

    • Validation Committee

    • Final approval of the commission for implementation

    • To be implemented w.e.f 1st April 2011

International practices prevalent

International Practices Prevalent

  • Losses settled

    • Paid

      • In kind

      • In Money

    • Settled

      • For each balancing period

      • on daily, weekly or yearly

    • Paid by

      • Only drawee

      • Both injector and drawee

        • In some adhoc ratio 50:50 or 45:55

    • Loss allocation factors may have two component

      • Fixed and variable(based on location, season, time of the day)

    • Paid based

      • on after the fact

      • on figures declared upfront

Issues in recovery of transmission losses

Issues in Recovery of Transmission Losses

  • System Operation Requirement

    • Losses are physical in nature and thus to be supplied in real time

    • Loss compensation shall be as actual losses in real time so that proper load generation balance is maintained.

  • Market Operation Requirement

    • Losses to be known in advance (as longer as possible)

      • to plan for future scenario

      • to make bid/price strategy

    • Calculation of individual payout is easy.

    • Whole process is transparent

    • Allocation is fair

  • Overall requirement

    • Administration of losses is easy

Loss sharing methods explained in literature

Loss sharing Methods…explained in literature

Loss allocation is a complex issue. To date no single loss allocation method has been universally accepted to be the most precise or the best one. Globally, different markets adopt different loss allocation schemes which suit their market structure. Various commonly followed methods are  

  • Pro rata allocation

  • Proportional sharing

  • Marginal / Incremental loss allocation

  • Loss allocation methods using the admittance matrix

  • Each of the above mentioned method has its own advantages and limitations.

Loss sharing methods pro rata allocation

Loss sharing Methods… Pro rata allocation

  • This is the method presently being followed in India. Under this, the loss is shared among the beneficiaries on pro-rata basis in a pre-defined manner, based on schedules/shares. It is relatively a simple method to use, however this does not take in to account the geographic distribution of the loads and the generators and is not sensitive to distance and direction. Since the losses are socialized, the calculations are simple and clear.

Loss sharing methods proportional sharing

Loss sharing Methods… Proportional sharing

In this method it is assumed that the inflow of power in to the bus is to be proportionally shared by all the out going feeders and the tracing of power between the generator and the load is to be achieved. It works on the principle that the loss of each line is to be shared by the loads in proportion to the power flow attributable to them and the respective losses are to be borne by the generators or the load. However the assumption of the proportional sharing of power may not always meet the electrical power flow laws and power tracing may also give erroneous results, particularly in the situations like loop flows and under such situations more assumptions have to be made to trace the power flows.

Loss sharing methods marginal incremental loss allocation

Loss sharing Methods… Marginal / Incremental loss allocation

Under this method losses are determined on the logic that any marginal change in bus injection/drawl leads to marginal change in the losses. Choosing of slack bus and handling of negative loss allocation etc, are some of the issues of this method

Some further references

Some further References

  • IEEE Trans Power System pp631-637 May 2000 A Physical flow based approach to allocating transmission losses .............

  • IEEE Trans Power System pp143-150 Feb 2000 Allocation of transmission losses to bilateral contracts.......

  • IEEE Trans Power System vol16 pp105 110 Feb 2001 Z 'Z' Bus loss allocation

  • IEEE Trans Power System vol 17 pp 26-33 Feb 2002 Incremental transmission loss allocation under pool dispatch....

  • IEEE Trans Power System vol 15 pp184-188 Feb 2000 Fair allocation of transmission power losses IEEE Trans Power System vol17 no3 pp571-576 Aug 2002 Transmission loss allocation: A comparison of different practical algorithms.

Procedure for sharing of losses based on june 2010 regulation of cerc

Procedure for sharing of losses based on June 2010 regulation of CERC

  • Procedure for Sharing of ISTS Losses

    • Prepared by NLDC in compliance with Regulation 6(1)

  • The procedure aims to keep computation:

    • Simple

    • Non-Recursive

  • Loss Application on Regional Basis

    • In line with existing practice

    • No Pan caking.

  • Injection and withdrawal loss would be calculated for each zone.

New methodology

New Methodology

  • Point of Connection Losses

    • Independent of Contract Path

  • 50% PoC losses + 50% Uniform Losses

  • Uniform Loss component

    • Based on Regional Losses of last week

  • Moderation of Losses

    • Based on Actual Regional Lossesof last week and Losses based on studies

Poc loss computation 1

PoC Loss Computation (1)

  • Computation of changes in losses in the system due to incremental injection / withdrawal at each node.

  • Loss Allocation Factor

Poc loss computation 2

PoC Loss Computation (2)

  • Output of System Studies

    • Loss Allocation Factor

    • MW Losses of each node

    • Weighted average losses (%) for each region

  • Zonal Loss : Weighted Average of losses at each node

  • Moderation of Zonal Losses

  • One PoC Loss for each entity per week


Loss sharing mechanism

Loss Sharing Mechanism

Software Provided by CERC

Calculation of Previous week Losses from SEM Data

Total Losses based on PoC

Zonal Losses as Computed from Hybrid Method

Moderation Of PoC Losses

Total Losses

(50% PoC+50%UC)


Moderation of losses 1

Moderation of Losses (1)

  • Need of Moderation

    • Difference in actual and study scenarios

    • Correct computation of injection and drawal schedule of various utilities.

    • Scheduled losses to be closer to actual losses in the system so that system mismatch is avoided.

    • Minimizing the mismatch between UI payable and receivable

  • Moderation at regional Level

  • Moderation Factor

    = Actual Losses of previous week (Aact) ( In %)


    Regional Losses based on Studies (As)(In %)

Sharing of inter state transmission losses

  • Regional Losses Based on Studies (As)

  • Weighted average Actual losses of a region

    Actual Transmission losses (in MWh) in Regional ISTS, L = ∑Injection of Regional Entities G + ∑Interregional injection I) - (∑Regional Entity drawals +∑Inter-regional drawals)

    Actual Percentage Regional losses, l = L*100/ (G+I)

    This would be computed for each 15 min time block and then averaged for each week.

Application of losses in scheduling

Application of Losses in Scheduling

  • Net PoC Loss = 50% Moderated PoC Loss + 50% Uniform Loss

  • Net PoC Loss to be applied on each regional entity

  • Drawee Entity to bear full losses for :

    • Long Term Transactions

  • Injecting Entity and Drawee Entity to share losses for:

    • Medium Term Transactions

    • Short Term Transaction

      • Collective Transactions

      • Bilateral Transactions

Case i intra regional long term transactions

Case I : Intra-Regional Long Term Transactions



92.15 MW

100 MW

Case ii inter regional long term transactions

Case II : Inter Regional Long Term Transactions


92.15 MW


97 MW

100 MW

Case iii long term transactions involving wheeling region

Case III : Long Term Transactions Involving Wheeling Region


92.15 MW

97 MW


97 MW

100 MW

Case iv intra regional medium short term transactions

Case IV : Intra-Regional Medium / Short Term Transactions

100 MW Contract



95 MW

103.09 MW

Case v inter regional medium short term transactions

Case V : Inter Regional Medium/Short Term Transactions

100 MW Contract


95 MW


100 MW

103.09 MW

Case vi medium short term transactions involving wheeling region

Case VI : Medium/Short Term Transactions Involving Wheeling Region

100 MW Contract


95 MW

100 MW


100 MW

103.09 MW

Sharing of inter state transmission losses

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