Abstract
Electricity wheeling is defined as the transmission of electric power from a seller to a buyer through a transmission network owned by a third party, and the wheeling will be brought into reality in a substantial scale by the deregulation of electric power industry.
One of the most important questions in the wheeling of electricity is how to set its service rate. It is necessary to set the proper wheeling rate in order to achieve the efficient management of the electricity network, and also in order to expedite the efficient introduction of independent power producers into the electricity markets.
We had already reported a methodology for setting the wheeling rate on the basis of marginal cost theory, but the time span was not taken into consideration in the previous paper. This paper describes the estimation of the long-term wheeling rate using a dynamic model, which includes capacity expansions both in power generation and transmission lines. The problem is formulated as a linear programming problem, and then, the applicability of the proposed method is demonstrated using a simplified network model.
