determination of network rental components in a competitive electricity market the locational marginal pricing lmp based settlement results in a surplus collected by the system operator from the consumers the nonlinear transmission losses and the constrained operation of the power system due to operating limits such as power flow limits on transmission lines cause the accumulation of this surplus this accumulated revenue referred to as the network rental in this paper has two main components loss rental and constraint rental this paper develops a method to calculate these different rental components paid by each consumer by combining the power flow tracing and kkt optimality conditions this yields quantitative determination of how each consumer has overpaid in the form of loss rental and constraint rental which in turn can be used to get a better insight of how the rental is accumulated simple three and four bus systems are used to demonstrate the proposed method

marginal pricing and supplement cost allocation in transmission open access the application of marginal costing to transmission pricing in open access schemes requires the collection of a supplement to finance the transmission systems the paper describes the application of marginal cost based pricing in the chilean power system and the difficulties faced in allocating the supplement among parties involved alternative methods for defining the allocation are formulated generalized generation and load distribution factors for cost allocation are formulated and implemented the methods are applied to allocate payments for transmission services provided by the transmission network and by a distribution company

discussion of allocation of transmission losses to bilateral contracts in a competitive environment and reply j bialek et al comments on the paper by f d galiana et al see ibid vol 15 no 1 p 143 50 2000 the original authors reply to the comments

the timing of monetary policy shocks a vast empirical literature has documented delayed and persistent effects of monetary policy shocks on output we show that this finding results from the aggregation of output impulse responses that differ sharply depending on the timing of the shock when the monetary policy shock takes place in the first two quarters of the year the response of output is quick sizable and dies out at a relatively fast pace in contrast output responds very little when the shock takes place in the third or fourth quarter we propose a potential explanation for the differential responses based on uneven staggering of wage contracts across quarters using a stylized dynamic general equilibrium model we show that a very modest amount of uneven staggering can generate differences in output responses similar to those found in the data

marginal loss pricing for hours with transmission congestion nodal electricity prices are designed to send efficient economic signals to market participants for operating and investment decisions the inherent nonlinearity of transmission losses and the use of marginal loss pricing can obscure the intended economic information in the loss component of nodal prices as one step in clarifying the determination of the marginal loss price component this paper discusses the calculation of nodal electricity prices in lossy networks and presents a variety of accepted methods for determining marginal loss this paper then proposes a method for calculating the marginal loss component of nodal prices during hours with congestion that reflects each market participant s contribution to marginal losses more accurately than current implementations the proposed method recognizes that increases in incremental energy flows cannot flow across constrained lines and thus system wide marginal losses should not be attributed to generators or loads in the constrained subregions the objectives of the discussion are to improve the understanding of how marginal losses are determined and also to improve the accuracy of the information conveyed in the marginal loss price component the ultimate goal is to promote more efficient price signals to electricity market participants for both transmission loss and congestion

estimating monetary policy effects when interest rates are close to zero abstract using a nonlinear structural var approach we estimate the effects of exogenous monetary policy shocks in the presence of a zero lower bound constraint on nominal interest rates and examine the impact of such a constraint on the effectiveness of counter cyclical monetary policies based on the data from japan we find that when interest rates are at zero the output effect of exogenous shocks to monetary policy is cut in half if the central bank continues to target the interest rate the conditional impulse response functions allow us to isolate the effect of monetary policy shocks operating through the interest rate channel when other possible channels of monetary transmission are present

loss allocation in energy transmission networks abstract in this paper we study a cost allocation problem that is inherent to most energy networks the allocation of losses in particular we study how to allocate gas losses between haulers in gas transmission networks we discuss four allocation rules two of them have already been in place in real networks and two others that are defined for the first time in this paper we then present a comparative analysis of the different rules by studying their behavior with respect to a set of principles set forth by the european union this analysis also includes axiomatic characterizations of two of the rules finally as an illustration we apply them to the spanish gas transmission network

towards a cost causation based tariff for distribution networks with dg this paper decomposes the effects of the transition from an average cost distribution tariff to a cost causation based distribution tariff in terms of time and location that uses nodal prices to recover losses and an extent of use method to recover fixed network costs based on use at coincident peak our decomposition is designed so that the effects of using coincident peak and location for fixed network charges as well as using marginal losses under constraints recovering the exact amount of losses and recovering exactly the cost of network service in total can be isolated and analyzed separately we apply our tariff transition and decomposition method to an example network with data from uruguay to isolate the various effects with and without a distributed generation dg resource we show moving to coincident peak charges and to fully charging for marginal losses while rebating the merchandising surplus through the fixed charges have the greatest effects on changes in distribution tariff charges dg provides countervailing cost changes to distribution tariffs for loads through loss reductions and the implicit creation of new network capacity for which it is paid the interaction of all these effects may lead to outcomes that are counter intuitive which further supports the need to decompose the tariff changes to fully understand the reasons for the direction and magnitude of changes in tariff charges in the transition to tariffs based more on cost causation

unbundling of transmission and ancillary services ii cost based pricing framework for pt i see ibid vol 12 no 2 1997 this paper presents a systematic framework for pricing transmission and ancillary services in competitive power markets this framework is based on the recovery of fixed and operating costs and it meets the traditional revenue requirements it is practical feasible easy to implement and to regulate it can be implemented with minimum transition cost this network flow dependent and nondiscriminatory framework is based on the decomposition approach presented in part i of this paper this decomposition forms an essential part of the proposed framework for usage based recovery of the fixed and operating costs the transmission system related fixed cost component is recovered from all transactions based on percentage utilization of the transmission system equipment the charge is based on the actual network power flows the ancillary service charge for a given transaction can be computed as the sum of the costs incurred at secondary generation for compensating the imbalance caused by that specific transaction the path providing function of the transmission grid is viewed as a true monopolistic service its pricing is cost based and charge for its use is usage based the generation based ancillary service supply can be made competitive its pricing is market based and charge for it is usage based a global overview of the proposed pricing strategy is analyzed in the context of other alternatives especially cost based methods a numerical example on a five bus system is given to illustrate the use of this pricing strategy

investments in modern production technology and the cash flow oriented epq model in this study we analyze investments in setup and production processes in the context of the traditional inventory problem the comparison of the results of a cash flow and a cost oriented model suggests the use of the net present value as a decision criterion the analysis shows that an additional investment which reduces setup cost decreases the optimal capital investment necessary to reduce production cost and vice versa an investment which increases the production rate however may increase or decrease the capital expenditure of an investment in the setup process

a probabilistic approach for determining the optimal amount of transmission system usage over the past decade electric power systems have been restructured based on different models to introduce competition among market participants transmission open access for suppliers and customers is one of the most prevailing unbundling services usually a connection tariff is established based on different market factors including the actual usage of the transmission network in brazil most vertically integrated companies owned by the federal and state governments were unbundled and new transmission companies are being created these companies make their assets available to the independent system operator designated as operador nacional do sistema eleacutetrico ons one of the main objectives of ons is to manage transmission services over a certain voltage level to ensure nondiscriminatory access to the grid all transmission users including regional distribution companies pay wheeling transmission charges at each delivery or connection point with the major brazilian network administrated by ons this paper presents a methodology for determining the optimal amount of transmission system usage atsu that must be contracted by a regional distribution company at each connection point in the proposed approach the maximum flow at each connection is represented as a random variable in order to obtain the distribution probability of the transmission charges as a function of the atsu parameter besides providing the optimal amounts to be contracted the proposed probabilistic methodology allows quantifying the risks of violation of each contract and estimating possible penalties all methodology development steps are described and illustrated through numerical examples an application to a typical brazilian regional distribution company is also discussed

allocation of transmission losses to bilateral contracts in a competitive environment under open access market driven transactions have become the new independent decision variables defining the behavior of the power system understanding the impact of bilateral transactions on system losses is important to be able to allocate a loss component to each individual transaction and improve economic efficiency the theory presented here is based on the argument that it is always possible to compute the exact loss allocation corresponding to an infinitesimal bilateral transaction this leads to a set of governing differential equations whose solution yields the loss allocation for contracts of any size several examples illustrate the properties of both the proposed allocation equations and other methods the dependence of the proposed solution on the path of integration and a number of implementation issues

a congestion management aflocation mechanism for multiple transaction networks in this paper we present a physical flow based congestion management allocation mechanism for multiple transaction networks we use the multiple transaction network framework constructed to characterize transmission congestion and then determine the contribution to congestion attributable to each transaction on a physical flow basis this allocation scheme explicitly addresses the issue of counter flows the allocation results are used in the congestion relief of the independent grid operator igo so as to allow it to acquire relief services to remove the overload congestion attributed to each transaction from the network in the most economic manner the congestion charges attributable to each transaction for its usage of the network are also determined we tested the proposed scheme on several systems and we illustrate its capabilities on a network based on the ieee 57 bus system we discuss the policy implications of the congestion relief allocation solution the proposed scheme provides physically reasonable results and is applicable to large scale networks

from eoq towards zi zero inventory zi is a new and powerful concept to improve production efficiency underpinning zi is set up reduction and this paper examines what eventuates when set up costs are cut the folklore is that set up reduction lowers inventory and costs we obtain results contrary to that reducing set up costs need not reduce inventory for example likewise lowering set up costs need not necessarily lower total production and inventory costs furthermore most investments produce marginally decreasing returns set up cost reduction prompts the opposite it produces marginally increasing not decreasing returns a parametric algorithm that calculates the benefit of set up cost reduction is provided most presentations of zi have been descriptive with very few mathematical models of it yet untaken by modeling certain zi concepts mathematically we scrutinize their validity and sometimes invalidity

a pricing method for transmission loss based on sensitivity analysis this paper presents a method to evaluate the economic value of transmission loss based on the share proportion principle and the sensitivity analysis we first formulate an optimal power flow problem to derive the operation conditions the nodal prices of each bus and the transmission prices between two buses and then trace the transmission loss during operation based on the share proportion principle of the graph theory the sensitivity analysis has been used to identify the wheeling path from each generator to any load and the value of transmission loss is also evaluated the proposed method is applied to the ieee 30 bus standard system which confirms our theoretical results the proposed method can be used not only to improve the efficient usage of the power grid and congestion management but also to provide valuable economic signals for the generation or transmission investment

financial intermediation and regime switching in business cycles the authors study a one sector growth model where capital investment is credit financed and there is an adverse selection problem in credit markets the presence of adverse selection creates an indeterminacy of equilibrium many equilibria display permanent fluctuations characterized by transitions between walrasian regimes and regimes of credit rationing cyclical contractions involve declines in real interest rates increases in credit rationing and withdrawals of savings from banks for some configurations of parameters all equilibria display cyclical fluctuations the authors provide sufficient conditions for deterministic cycles consisting of m periods of expansion followed by n periods of contraction to exist copyright 1998 by american economic association

transmission loss allocation through equivalent bilateral exchanges and economical analysis a new loss allocation la scheme based on the principle of equivalent bilateral exchanges ebes is presented and compared with other available techniques formulation and results from extensive simulations including consistency tests show that the suggested methodology has several desirable properties it is flow based requiring only a solved load flow for its implementation it is not dependent on the choice of a slack bus it is straightforward to apply undesirable negative loss allocation is not produced and low volatilities are shaped an economic analysis with various la methods is also carried out when these are integrated into a combined economic dispatch load flow dispatch strategy a likely scenario for la in a real system this combined dispatch strategy yields prices charged to the loads and rates received by the generators that account for loss allocation and loss supply results show that these economic indexes are very close to the marginal costs derived from an optimal power flow opf approach with the advantage of reducing volatility

a decentralized approach for optimal wholesale cross border trade planning using multi agent technology over the past decade the power industry has been undergoing deregulations to introduce competitions among market participants once centralized decision making must now adapt to the new market structure the optimal cross border electricity trade planning is an important issue in interconnected power systems under transmission open access in this paper a decentralized approach is suggested to solve the problem using multiagent technology in the new approach rational market participants make decisions based on their own benefits in the meantime the minimum production and transmission cost of the whole system can be reached without a central coordination except necessary information exchange through media like the internet a relevant lemma has been proven the approach is implemented via a multiagent system using java programming language computer tests on a five area test system show that the suggested new approach is effective and promising

credit and economic activity credit regimes and nonlinear propagation of shocks in this paper we examine empirically whether credit plays a role as a nonlinear propagator of shocks this propagation takes the form of a threshold vector autoregression in which a regime change occurs if credit conditions cross a critical threshold using nonlinear impulseresponse functions we evaluate the dynamics implied by the threshold model these suggest that shocks have a larger effect on output in the tight credit regime than is normally the case and that contractionary monetary shocks typically have a larger effect than expansionary shocks finally using a nonlinear version of historical decompositions we attempt to determine the relative contribution to output growth of shocks and the nonlinear structure

long run incremental cost pricing based on unused capacity this paper proposes a novel approach for providing long run incremental cost lric pricing in network charges the proposed approach makes use of the unused capacity of an exiting network to reflect the cost of advancing or deferring future investment consequent upon the addition of generation or load at each study node on a distribution network compared with existing approaches to lric pricing the proposed approach produces forward looking charges that reflect both the extent of the network needed to service the generation or load and the degree to which that network is utilized the efficacy of the proposed lric approach has been validated by a comparison with the established investment cost related pricing icrp method used for deriving transmission charges in great brain gb this paper draws on work undertaken in projects for western power distribution and ofgem office of gas and electricity markets u k however the views expressed in this paper are those of the authors

transmission loss allocation a comparison of different practical algorithms a pool operated electricity market based on hourly auctions usually neglects network constraints and network losses while applying its market clearing mechanism this mechanism determines the accepted and nonaccepted energy bids as well as the hourly market clearing prices as a result ex post procedures are needed to resolve network congestions and to allocate transmission losses to generators and demands this paper focuses on transmission loss allocation procedures and provides a detailed comparison of four alternative algorithms 1 pro rata pr 2 marginal allocation 3 unsubsidized marginal allocation and 4 proportional sharing a case study based on the ieee rts is provided different load scenarios covering a whole year are analyzed finally conclusions and recommendations are stated

the asymmetric effects of monetary policy a nonlinear vector autoregression approach this paper tests for nonlinearity in a standard vector autoregression including output prices and money supply using an estimation strategy that is consistent with a wide range of structural macroeconomic models shocks to the money supply are found to have stronger output effects and weaker price effects when output growth is initially low positive and negative monetary shocks are found to have nearly symmetric effects in addition there is some evidence that shocks of different magnitudes have asymmetric effects these results are consistent with the view that the aggregate supply curve is convex

the financial cycle and macroeconomics what have we learnt abstract it is high time we rediscovered the role of the financial cycle in macroeconomics in the environment that has prevailed for at least three decades now it is not possible to understand business fluctuations and the corresponding analytical and policy challenges without understanding the financial cycle this calls for a rethink of modelling strategies and for significant adjustments to macroeconomic policies this essay highlights the stylised empirical features of the financial cycle conjectures as to what it may take to model it satisfactorily and considers its policy implications in the discussion of policy the essay pays special attention to the bust phase which is less well explored and raises much more controversial issues

transmission loss allocation through complex power flow tracing this paper presents a new method for transmission loss allocation the method is based on tracing the complex power flow through the network and determining the share of each load on the flow and losses through each line transmission losses are taken into consideration during power flow tracing unbundling line losses is carried out using an equation which has a physical basis and considers the coupling between active and reactive power flows as well as the cross effects of active and reactive power on active and reactive losses a tracing algorithm which can be considered direct to a good extent as there is no need for exhaustive search to determine the flow paths as these are determined in a systematic way during the course of tracing results of application of the proposed method are also presented

combined pool bilateral dispatch i performance of trading strategies this three paper series deals with the dispatch of power networks under mixed pool bilateral trading the major questions examined are i to what degree does the relative level of pool versus bilateral trading influence performance in terms of individual power levels costs prices revenues and expenditures ii what is the comparative performance of mixed trading with firm and nonfirm bilateral contracts under various curtailment strategies and iii is the revenue derived from the pool and bilateral trading consistent with the corresponding unbundled costs the above issues are sequentially addressed in each of the three parts the eventual goal of these results is to help generator and load serving entities choose appropriate relative levels of pool versus bilateral trades while considering risk economic performance as well as physical constraints this paper proposes a one step optimal power flow model that dispatches the pool in combination with the privately negotiated bilateral contracts while minimizing cost and accounting for both losses and congestion in part i notions of pool bilateral demand and generation as well as a number of technical and economic performance measures for each competing entity are defined this dissection of total and individual financial measures according to pool or bilateral trading allows the market participant to evaluate the profitability of each component of its chosen pool bilateral mix a number of simulation results illustrate the effect of varying the relative levels of pool bilateral trading on the values of individual performance measures

effects of the us monetary policy shocks during financial crises a threshold vector autoregression approach abstractthis article analyzes the impact of monetary policy during periods of low and high financial stress in the us economy using a threshold vector autoregression model there is evidence that expansionary monetary policy is effective during periods of high financial stress with larger responses having a higher proportionate effect on output the existence of a cost channel effect during periods of high financial stress implies the existence of a short run output inflation trade off during financial crises large expansionary monetary shocks also increase the likelihood of moving the economy out of a high financial stress regime

complex losses allocation to generators and loads based on circuit theory and aumann shapley method this paper presents a new method to allocate active and reactive losses simultaneously to generators and loads the allocation is calculated for each transmission branch identifying and quantifying the buses responsibilities in losses this is a two step process in the first step generators are modeled as current injections and loads as constant admittances in order to determine generator participations in losses in the second step loads are modeled as current sources and generators as constant admittances in order to determine load participations in losses the aumann shapley and circuit theories are used to calculate the participation of each real and imaginary current component considering them as independent players in the complex losses allocation game the properties of the aumann shapley method ensure equitable allocation and recovery of the total active and reactive losses counter flow cross subsidy and negative allocation issues are discussed numerical results are presented and discussed to demonstrate the applicability of the proposed method

the impact of electricity market liberalization in turkey free consumer and distributional monopoly cases abstract electricity sector has grown substantially in turkey since the early 1960s as a result of rapid industrialization and urbanization the vertically integrated state owned company had a legally established monopoly on the generation transmission and distribution of electricity in turkey with the support and encouragement of international organizations like the world bank turkey has initiated a comprehensive program to liberalize and privatize the electricity market in 2001 the liberalization of the electricity market in turkey started in the distribution side of the market the distribution network was divided into 21 distribution regions and in each of these separate initially state owned distribution companies have been authorized to distribute and sell electricity the plan envisaged to complete privatization of all distribution companies until the end of 2006 this study compares the welfare implication of privatization of the distribution networks by comparing two extreme cases a pure regional distributional monopoly case and a representative pure free consumer case with a benchmark case of administered price regulation for this purpose we develop a simulation model of the turkish electricity system and use the data on generation and distribution costs our simulation analysis shows that substantial welfare losses occur if the distributional companies behave as regional monopolists our findings reiterate the importance of regulation and market design

closure to discussion of transmission loss allocation part i single energy market for original article by a m leite da silva and j g de carvalho costa see ibid vol 18 p 1389 94 nov 2003 and for discussion by a j conejo and f d galiana see ibid vol 19 no 4 p 2111 nov 2004

prospective reconciliation of transmission loss cost in alberta one of the challenges in alberta s deregulated electricity market is to recover transmission loss costs in a fair and equitable manner the independent system operator iso the alberta electric system operator or aeso in alberta canada has introduced a new prospective methodology to reconcile the transmission loss revenue to loss cost on an annual basis since january 1 2006 in the reconciliation process a quarterly calibration factor cf is calculated to true up the difference between loss revenue and loss cost the cf is defined as the percentage of the combined actual and forecasted difference in loss revenue and loss cost divided by the loss factor customer volumes and pool price the focus behind this chosen methodology is to have a small cf in each quarter a stable reconciliation pattern and a small year end difference the new methodology has met these three goals in alberta s deregulated electricity market

reliability differentiated real time pricing of electricity optimal resource planning and power dispatch models from a societal welfare point of view imply an optimal pricing policy which is referred to here as reliability differentiated real time pricing or in short reliability differentiated pricing this pricing scheme combines real time pricing and priority pricing with reliability differentiation based on consumer outage costs this pricing policy is analyzed the model used in the analysis is developed with particular emphasis on consumer behavior and welfare effects the implications of the model for the pricing of spinning reserve and firm capacity as well as for revenue reconciliation are examined it is concluded that such a pricing scheme will in general result in greater attainable welfare than either the real time pricing or priority pricing paradigms moreover it results in the maximum attainable welfare for the system with revenue reconciliation and provides an optimal pricing scheme for spinning revenue and firm capacity

transmission loss unbundling and allocation under pool electricity markets this paper presents a methodology based on the circuit theories for unbundling and allocation of transmission losses among the participants of a pool based electricity market starting from a known operation point and using the basic network equations without additional assumptions an expression of the branch losses based on nodal current injections is derived since the power flow equations and circuit theories are satisfied the methodology turns explicit in a natural way separating the losses at each system branch and assigning the responsibility to the respective market participants it means that the loss allocation of each branch which is produced by each generator and consumer is obtained extensions and strategies considering unsubsidized and predefined proportion based loss allocation as well as issues related with the allocation fairness and transparency are also included comparisons with previous methods and validation tests of the proposed method are reported by using the ieee reliability test system

sticky price and limited participation models of money a comparison abstract we provide new evidence that models of the monetary transmission mechanism should be consistent with at least the following facts after a contractionary monetary policy shock the aggregate price level responds very little aggregate output falls interest rates initially rise real wages decline by a modest amount and profits fall we compare the ability of sticky price and limited participation models with frictionless labor markets to account for these facts the key failing of the sticky price model lies in its counterfactual implications for profits the limited participation model can account for all the above facts but only if one is willing to assume a high labor supply elasticity 2 percent and a high markup 40 percent the shortcomings of both models reflect the absence of labor market frictions such as wage contracts or factor hoarding which dampen movements in the marginal cost of production after a monetary policy shock 1997 elsevier science b v

studies of bilateral contracts with respect to steady state security in a deregulated environment under a deregulated environment electricity consumers and suppliers will be permitted to establish various bilateral service contracts the transmission company however will only have to honour and execute these bilateral contracts as far as the system design and operating conditions permit a fundamental question is to what extent the system security could affect these contracts and what kinds of system reinforcements will be required to meet the future contract needs this paper describes a series of studies modelling the bilateral contracts by using a transaction matrix t the concept of the transaction matrix is to expand the conventional load flow variables such as generations pg and loads pd into a 2 dimensional matrix t each element of t namely t sub ij corresponds to a bilateral contract between a supplier pg sub i and consumer pd sub j a generalized linear programming formulation is then proposed to solve various system operation and planning problems under a deregulated environment subjected to the steady state security constraints e g generation and line flow limits examples are presented to illustrate how to use this formulation to maximize any bilateral contract individual generation or groups of generations or to minimize the necessary correction needed for a proposed transaction matrix t sup 0 in order to comply with the security requirements other studies such as the use of monte carlo methods to study the behaviour of random bilateral contracts are also presented and discussed

wheeling of power under deregulated environment of power system a bibilographical survey the power industry is moving rapidly from regulated conventional setup to a deregulated environment there is an urgent need to keep a track of international experiences and activities taking place in this emerging field this paper gives a bibliographical survey and general backgrounds of research and development in the field of power system wheeling under deregulated environment based on over 170 published articles wheeling in general and the establishment of wheeling rate in particular are subjects of extensive debate today this will be very much useful for all countries especially those developing countries which are moving toward the unbundling of electricity supply industry esi the collected literature have been divided into many section so that new researchers do not face any difficulty for obtaining literature particularly in the area of wheeling of power under deregulated environment

nodal uniform or zonal pricing distribution of economic surplus competitive markets for electricity determine either a uniform marginal price ump a set of nodal marginal prices nmps or a smaller set of zonal marginal prices zmps in theory the nmp system is best as it correctly accounts for transmission constraints and losses in some versions but critics allege that the large number of prices is confusing since the ump or zmp solution must be adjusted to account for transmission constraints and losses it is reasonable to consider a market design in which actual dispatch corresponds to an nmp model that accounts for losses and if a ump or zmp model is used at all it is only to compute prices for settlements and compensation for constrained on or off generation or load we prove that if used in this way the ump or zmp models a do not affect the total economic surplus b redistribute the surplus among generators and loads at the different nodes and c give perverse incentives for generation expansion we illustrate on a realistic system

cost of long distance electricity transmission in china abstract china s energy resources reserves are concentrated on the central and western regions meanwhile the major energy demand is distributed in the eastern region large scale of cross regional electricity transmission is implemented to guarantee the power supply the long distance electricity transmission ldet cost is an essential component of the final detail price this paper proposes a new method to evaluate the real cost of ldet which mainly focuses on the price mark up between the electricity exporter and importer a weighted least square regression model is applied to evaluate the influence of the factors that could impact the real operating cost of the ldet furthermore we apply the ldet cost model to evaluate the synthesize cost of renewable energy and find the current renewable policy of china is inefficient

cost of wheeling methodologies the cost of wheeling and the methodology by which it is computed is a high priority problem throughout the power industry due to the growth in transmission facilities the cost differentials between utility companies and the dramatic growth in nonutility generation capacity this paper contains descriptions and summaries of computational procedures and data requirements of four embedded cost methodologies two long run incremental cost methods and the short run marginal cost method four methodologies are also presented for allocating the wheeling costs among a number of wheels when simultaneously present on a company s system as required for the standard long run incremental cost method

are the effects of monetary policy asymmetric huntley schaller by building on the hamilton 1989 markov switching model we examine questions like does monetary policy have the same effect in expansions and recessions given that the economy is currently in a recession does a fall in interest rates increase the probability of an expansion does monetary policy have an incremental effect on the growth rate within a given state or does it only affect the economy if it is sufficiently strong to induce a state change e g from recession to expansion as suggested by models with sticky prices or finance constraints interest rate changes have larger effects during recessions jel e52 e32 much of the recent work in macroeconomics has proceeded under the assumption that variables follow linear stochastic processes with constant coefficients as a result some of the richness of the burns mitchell analysis such as its focus on asymmetries between recessions and expansions may well have been lost blanchard and fischer 1989 7 i introduction for decades macroeconomists have debated whether monetary policy has the same effect on real output in expansions and recessions as far back as the 1930s keynes and pigou debated whether monetary policy would have less effect on output during a severe economic downturn in the 1960s there were active debates on a very different proposition namely whether the rightward portion of the aggregate supply curve was vertical so that monetary policy would have less effect on real output during expansions in this article we provide a new type of evidence on whether monetary policy has different effects depending on whether the economy is in an expansion or recession empirical evidence on this issue is particularly relevant in light of new theoretical work in macroeconomics that predicts asymmetric effects of demand shocks conditional on the state of the economy two examples of this work are s s type models of price adjustment and models in which there are agency costs of financial intermediation 1 the intuition for the latter class of models is simple 2 when there is information asymmetry in financial markets agents may behave as if they were constrained for a variety of reasons these finance constraints are more likely to bind during recessions when the net worth of agents is low an increase in interest rates will then have two effects on investment the standard effect of increasing the cost of capital and therefore reducing investment demand and an additional effect of reducing liquidity e g by increasing debt service obligations and thus reducing investment demand for constrained agents as a result monetary policy actions that change interest rates will have greater effects during a recession 3 the s s type price adjustment models of ball and mankiw 1994 caballero and engel 1992 and tsiddon 1993 lead to a convex aggregate supply curve and therefore also imply that monetary policy will have stronger effects during recessions one of the more frequently cited empirical papers on the potentially asymmetric effects of monetary policy is cover 1992 which finds evidence that positive monetary shocks have different effects from negative monetary shocks we are looking at a different type of asymmetry namely between booms and recessions we study asymmetries using an extension of the markov switching model developed by hamilton 1989 estimated over the period 1955 93 in hamilton s econometric specification the growth rate of output depends on a state variable that corresponds to an expansion or recession this approach has several advantages first unlike linear projections it allows for nonlinearities and asymmetries second in estimating the recession coefficients it gives greater relative weight to observations that most clearly correspond to recessions and similarly for the expansion coefficients

a general formulation for lmp evaluation the evaluation of locational marginal prices or lmps which constitute the basis of the new generation of market design in the u s is a critical need in the side by side operation of electricity markets and power systems their use in various applications such as congestion management and hedging requires specific lmp components in the computations we provide a general formulation for the evaluation of the lmp components by making explicit use of the important role played by the nodes with generators with free capacity on the other hand the lmps of the nodes without generation or with the generators at their limits are a function of the lmps at the marginal nodes and the impacts of the network constraints including the losses in the network in the formulation we pay special attention to the importance of the assumptions and specifications the so called policy specification in the determination of the components we obtain a very general formulation that brings under a single framework the different decomposition approaches that exist the formulation s comprehensiveness brings numerous insights into the various decompositions provides a platform for their comparative analysis and allows us to understand the direct implications and the role of the policy specified moreover the formulation reveals the limitations of any decomposition into the components due to the underlying structural interdependencies among them which is clearly shown in this paper we provide an example to illustrate the capabilities and the insights obtainable with the use of this formulation

framework for assessing the economic efficiencies of long run network pricing models this paper presents a framework for assessing the economic efficiency of different long run network pricing models the aim is to provide a quantifiable efficiency measure that will inform regulators network operators and network users when an alternative pricing model is contemplated the efficiency measure is derived from the long term network development costs that flow from a dynamic interaction between network pricing and planning that is the response of network users to differing charging models the consequential network investment and new financial incentives that follow reinforcement of the network to illustrate the approach the framework has been used to assess the relative efficiency of three broad class of distribution pricing models in a study undertaken for the great britain gb s regulator for gas and electricity markets in england wales and scotland ofgem the study contemplated three pricing models that are used in practice the efficiency assessment in the ofgem study was conducted on a pseudo distribution reference network on the assumption that the results from the reference network could be scaled up to the national level then the assessment suggests that by moving from the present drm model to the more economic lric approach gb distribution network operators could save in the region of pound200 m over the next 20 years in their network investment costs this paper draws heavily on the project undertaken for ofgem but any views expressed are solely those of the authors

improved transmission representations in oligopolistic market models quadratic losses phase shifters and dc lines practical models of competition among power generators who possess market power have generally had to use simplified models of transmission costs and constraints in order to be tractable in particular the linearized dc load flow model has been popular in complementarity and other types of oligopoly models in this paper we show how such models can be generalized to include quadratic losses controllable dc lines and phase shifting transformers these generalizations preserve convexity of the feasible region a property that facilitates computation and proof of solution uniqueness and existence piecewise and successive linearization formulations are also provided that allow consideration of nonlinear losses in models that require linear constraints a simple six bus example illustrates the application of these generalizations in that example the impact of losses on prices is much greater under strategic behavior than under competition large scale applications of these approaches to markets in western north america and the european union illustrate how inclusion of nonlinear losses and controllable dc lines can affect estimates of prices flows and economic efficiency indices resulting from oligopoly models

a novel nucleolus based loss allocation method in bilateral electricity markets the situation of current research on power losses allocation in bilateral electricity markets is presented based on cooperative game theory a novel nucleolus theory based method for power losses allocation under the bilateral transactions model is put forward and compared in detail with the shapley value based allocation method the impacts of different market players on network power losses are taken into account with the new method network power losses can be allocated to each transaction reasonably the allocation results would not be affected by the sequence that each transaction is formed and be active the method answers for the open equal and impartial principles of electricity market and can be easily understood and accepted by market players numerical tests validated the equity and validity of the method

the economic dispatch with consideration of transmission service charge for a generation company summary form only given as follows this paper presents a novel economic dispatch strategy for a generation company which owns several units with different fuel costs efficiency and locations and has a bilateral contract with several large customers the proposed strategy not only considers the generation cost but also takes into account the wheeling charge for the use of the transmission system a modified megawatt mile method is proposed to calculate the wheeling cost in this paper finally the calculation result of economic dispatch for a generation company with two units and their loads in a real power system is demonstrated

nondiscrinilnatory system losses dispatching policy in a bilateral transaction based market in this paper a new method to allocate transmission losses for simultaneous bilateral transactions is proposed the methodology uses a circuit approach of the system in conjunction with a classical power flow for a given operating point it is possible to derive system loss expression as a sum of partial terms due to each transaction these transaction loss components supplied by slack buses can turn into costs associated with the respective transactions alternatively in this paper it is proposed that each transaction provides for its own loss thus eliminating the need for a balancing mechanism in this case the developed methodology evaluates the increase of active power at each transaction generator through loss contributions not arbitrarily assumed but calculated from a developed loss allocation formula the main advantage of the developed method lies in its simplicity and capability of treating multiple transactions simultaneously

note can a reduction in set up costs indeed increase total costs zangwill zangwill w i 1987 from eoq towards zi management sci 33 1209 1223 has constructed an example which purports to show that reducing set up costs can increase total cost we show that this happened as a result of restricting the policies to be of a greedy nature the expected cost of truly optimal policies is shown not to increase

a novel policy for locational marginal price calculation in distribution systems based on loss reduction allocation using game theory in this paper a novel locational marginal price lmp policy for distribution system with significant penetration of distribution generation dg in competitive electricity market is presented this new lmp method is based on remunerating dg units for their participation in reduced amount of energy losses in distribution systems brought about by participation of all dg units in supplying demand also this method is combined with an iterative solution this approach provides an efficient tool for distribution companies discos to estimate the state of the system in the next step which other existing approaches of lmp fail to provide this system state estimation finally in order to expand lmp method and provide effective prediction method for discos to estimate the day ahead state of the system ann tool is employed to predict the market price and demand for the next 24 h this lmp prediction is a powerful operational tool for disco to exert its control over private dg units however prediction methods contain error therefore uncertainty modeling is implemented for modeling the effect of error in prediction on the lmp calculation for the next day

a methodology for allocating transmission losses due to cross border trades transmission pricing of cross border trades is often difficult since individual countries may use incompatible internal transmission pricing regimes and they are usually unwilling to disclose any sensitive information about their own systems in this paper the use of a tracing methodology is proposed to overcome these problems using loss allocation problem as an example firstly a modification of the tracing methodology is presented in which the loss is allocated in a direct way then a unifying tracing based methodology of transmission pricing for cross border trades is proposed the only data required are the flows in the tie lines and the charges to be applied to the border nodes in each country no information is required about individual transactions load generation profiles or internal networks the methodology is illustrated on the ieee 118 node network divided into four areas each with a different internal transmission pricing methodology the proposed methodology is shown to be simple transparent and very fast and it can deal effectively with cyclic flows

credit rationing and the monetary transmission mechanism according to alan blinder s 1987 model of credit rationing a tightening of monetary policy may have strong effects on the real sector when credit is already tight but weak effects when credit is initially plentiful p 343 the tighter the state of recent monetary policy the more likely it is that the economy s credit constraint will be binding and hence the greater will be the output effects of monetary policy this paper provides a test of the blinder proposition using postwar quarterly u s data and the results are then used to estimate the importance of credit rationing as a channel through which monetary policy influences the economy i consider three alternative criteria for determining when the economy is creditrationed the first criterion states that the economy is credit rationed if recent monetary policy as measured by one of two alternative monetary variables has been substantially tighter than average the second method draws on work by otto eckstein 1983 and allen sinai 1976 who developed estimates of periods of credit crunch based on a wide variety of indicators of credit market conditions the third and final approach is based on stephen king s 1986 estimates of the excess demand for commercial bank lending section i develops the specification of the tests section ii reports regressions and analyzes the implications for the monetary transmission mechanism and section iii presents conclusions

a physical flow based approach to allocating transmission losses in a transaction framework a physical flow based approach to allocating transmission losses in a multiple transaction system is presented the allocation scheme is developed using a framework in which the transactions are explicitly represented the proposed scheme is based on expressing losses explicitly in terms of all the transactions in the system an important property of the allocation scheme is its effective capability to deal with counter flows that result in the presence of specific transactions extensive numerical testing indicates that the allocation scheme produces loss allocations that are appropriate and that behave in a physically reasonable manner test results on several systems are presented

transmission loss allocation i single energy market this paper presents a new methodology for allocating transmission losses to the participants of a single energy market the proposed approach is based on the incremental transmission loss concept and is implemented through two models basic and extended in the basic model the total system losses are estimated through the linear dc load flow equations while the extended model uses the exact ac formulation the concept of center of losses is used a fictitious bus in the system network where all transactions are compensated for transmission losses both models provide a sharing of transmission losses among generators and loads based on a predefined proportion for instance 50 50 for each participant class some important aspects related with the allocation fairness and transparency are illustrated by numerical applications with the ieee reliability test system the extension of this methodology to interconnected energy markets is treated in a companion paper

economic inefficiencies and cross subsidies in an auction based electricity pool this paper compares two contrasting yet often used electricity market clearing procedures i an auction based algorithm including congestion management and transmission loss cost allocation and ii an optimal power flow the auction procedure produces a single period unit commitment and hence can be compared directly to an optimal power flow solution these algorithms are compared in terms of the economic efficiency of the solution attained and in terms of cross subsidies among generators and demands the purpose of this comparison is to quantify the actual cost to market participants of using a simple seemingly transparent procedure such as an auction based algorithm versus an integrated but computationally intensive one such as an optimal power flow

credit rationing and effective supply failures the topic of this paper is among the oldest and most fundamental in monetary theory how and why does monetary policy affect real economic activity traditional answers hold that the central bank can manipulate aggregate demand by engineering expansions or contractions of the medium of exchange in its monetarist variant this story posits a direct link between something called m and aggregate spending in its keynesian variant the story holds that adjustments in asset prices brought about by a change in m lead to more spending especially on capital goods in either case short run stickiness of prices is needed to translate some of the changes in demand into movements of real output in recent years these conventional stories have become increasingly implausible as stiglitz and i blinder and stiglitz i 983 have argued elsewhere with money becoming more and more difficult to define it is becoming increasingly difficult to believe that the central bank can cause a recession by contriving a shortage of an arbitrary subset of assets called m put differently the point seems both simple and compelling if there are ready substitutes for money control of money will not give the authorities much leverage over the real economy hence this paper develops an explanation for how central bank policy affects